Dividends
If you received dividends from a corporation in which you owned
stock, they will generally be reported to you on a copy of IRS Form
1099-DIV. The ordinary dividends you received are shown in Box 1
on the form. However, you must report all dividends you receive even
if you don't receive the 1099-DIV. For example, you must report distributions
from your small C corporation business that should be treated as dividends,
not salary.
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Work Smart If you are a partner or an S corporation
shareholder, you must examine your Schedule(s) K-1 to determine if
you have any reportable dividend income from your distributive share(s)
of dividends from partnerships or S corporations. These dividends
are reported to you on Schedule K-1 (Form 1065) and Schedule K-1 (Form
1120S). |
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You'll also receive a Form 1099-DIV from mutual funds
or real estate investment trusts (REITs) that pay dividends during
the year. If the total amount of all ordinary dividends and interest
you received for 2014 from all sources is $1,500 or less, you don't
have to itemize your dividends on Schedule B of Form 1040 or Form
1040A, although you must report the total amount as income. If dividends
and interest totaled more than $1,500, you must complete Schedule
B.
An exception to the $1,500 dollar rule applies if you
received some dividends as a nominee (that
is, some dividends were reported as income to you on a 1099-DIV form
but they really belonged to another taxpayer who is not your spouse,
perhaps because you were joint owners of the account). .
In
that case, you must complete Part II even if total dividends were
less than $1,500; show your total dividends received, and then subtract
the amounts you reported to the nominees on another 1099-DIV. The
net result will be the total taxable dividends.
If you did
receive dividends as a nominee, you'll have to send a 1099-DIV to
the actual owner(s) of the dividends by January 31, plus a copy to
the IRS along with Form 1096 by February 28. If you need to file
these forms, you must use official forms printed with special, machine-readable
ink - you can't use paper forms that you downloaded from the Internet
and printed from your home computer. In addition, you can face a fine
of $50 per return if you don't use the official version.
Call
the IRS at 1-800-TAX-FORM and ask them to send you copies of the official
forms.
- What are dividends? The IRS draws
the line between dividends and interest in sometimes unexpected ways.
- Nontaxable distributions are sometimes
made by investment accounts, and you'll want to avoid reporting them
as dividends.
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