06e – Form 1099-DIV – Dividends and Distributions

📄 Form 1099-DIV – Dividends and Distributions:-

Form 1099-DIV is an IRS tax form used to report dividends and certain distributions paid to taxpayers by banks, corporations, mutual funds, and other financial institutions.

If you earned $10 or more in dividends during the year, the payer must issue this form.

🔍 Key Points:-

1️⃣ Who issues it?
• Corporations, mutual funds, ETFs, brokers, and other investment companies.

2️⃣ Who receives it?
• Investors who earned taxable dividends or capital gains distributions.

3️⃣ What does it contain?
• Ordinary dividends
• Qualified dividends (taxed at lower capital gains rates)
• Capital gain distributions
• Non-dividend distributions (return of capital)
• Federal income tax withheld (if applicable)

4️⃣ When is it issued?
• Must be provided to taxpayers by January 31 of the following year.

5️⃣ Why is it important?
• Dividend income must be reported on Form 1040, often with Schedule B if over $1,500.
• The IRS uses it to verify your reported investment income.

💡 Example:
If you own shares in a mutual fund and receive $200 in qualified dividends and $50 in capital gain distributions in 2024, you’ll get Form 1099-DIV from the fund by January 31, 2025 to report on your 2024 tax return.

✅ Tip: Qualified dividends may be taxed at a lower rate, so reporting them correctly can reduce your tax bill.