What Form 1099-DIV (2014) Is For
IRS Form 1099-DIV (2014) reports dividend income and other investment income paid during the tax year. Financial institutions, mutual funds, and other financial institutions must issue this form when a taxpayer receives dividends, capital gains distributions, or other distributions from stocks, mutual funds, money market funds, or similar investments. The Internal Revenue Service uses this information to confirm the taxable income reported on a tax return.
This form applies to anyone who received ordinary dividends, qualified dividends, capital gain distributions, exempt interest dividends, or other distributions in 2014. It also applies when federal income tax was withheld under backup withholding rules, when state income tax was withheld, or when a foreign corporation or a qualified foreign corporation made dividend payments.
When You’d Use Form 1099-DIV
A taxpayer uses Form 1099-DIV when reporting investment income for the 2014 tax year. The information on the form is required to report total ordinary dividends, qualified dividends, capital gains, and other distributions on a federal tax return. This form is also used when investment activity occurs in a taxable brokerage account rather than a retirement account.
A taxpayer filing late must still report every amount listed, including foreign tax, federal income tax withheld, or state income tax withheld. The Internal Revenue Service already holds a copy of each form, and missing figures may lead to notices or adjustments. A taxpayer files an amended return using Form 1040X if a corrected form is issued or if more than one form was received but not reported on the original return. An amended return may also be required when a taxpayer reported only the amount of ordinary dividends without including qualified dividends or capital gain distributions.
Key Rules or Details for 2014
For the 2014 tax year, Form 1099-DIV reports dividend income, capital gains distributions, exempt interest dividends, and other distributions paid by financial institutions, mutual funds, and regulated investment companies. It separates ordinary dividends, qualified dividends, and capital gain dividends, each of which affects taxable income differently under the Internal Revenue Code. Any federal income tax withheld, state income tax withheld, or foreign tax must be reported on the tax return because the Internal Revenue Service verifies these amounts against what the taxpayer reports.
Taxpayers must report dividends paid from a taxable brokerage account even when 1099-DIV forms come from multiple accounts or other financial institutions. They must review the social security number or taxpayer identification number, confirm the total ordinary dividends and total capital gain distributions, and ensure that all reporting distributions match the investment records. Amounts involving a qualified foreign corporation, qualified REIT dividends paid, private activity bonds, or qualified small business stock also appear on IRS Form 1099-DIV 2014. They must be included when calculating federal taxes during tax season.
For complete details on reporting, withholdings, and tax filings, see our guide for Information Returns & Reporting Forms.
Step-by-Step (High Level)
Step 1: Gather All Forms
A taxpayer must gather all copies of Form 1099-DIV from each financial institution, mutual fund company, or investment provider. A taxpayer with multiple accounts may receive more than one form.
Step 2: Verify Personal and Account Information
A taxpayer must confirm that the Social Security number or taxpayer identification number is correct. The taxpayer must also demonstrate that the investment amounts match their financial records.
Step 3: Organize Distributions
A taxpayer should list each payer and record information such as total ordinary dividends, qualified dividends, capital gain distributions, and federal income tax withheld. This helps ensure accurate reporting.
Step 4: Report on the Tax Return
A taxpayer must transfer all amounts to the correct lines on the tax return. A taxpayer filing more than $1,500 in ordinary dividends must file Schedule B. Federal income tax withheld and state income tax withheld must also be included on the withholding section of the return.
Step 5: Address Special Situations
A taxpayer must correctly report foreign tax, exempt interest dividends, or cash liquidation distributions. Investment expenses are reported on different lines depending on whether deductions are itemized.
Step 6: Keep Records
A taxpayer must retain Form 1099-DIV and related documents because they may affect future returns, fair market value calculations, or capital gain reporting.
Common Mistakes and How to Avoid Them
- Ignoring small dividend amounts under $10: Report all dividends as taxable income, even if no Form 1099-DIV is issued, to avoid IRS matching notices.
- Adding total and qualified dividends together: Report Box 1a as total ordinary dividends and treat Box 1b as included in Box 1a to prevent overstating income.
- Forgetting reinvested or noncash dividends: Include reinvested dividends in income for the year received and track them since they increase your cost basis.
- Overlooking corrected Form 1099-DIV statements: Use the corrected form for final reporting and file Form 1040-X if the changes affect your return.
- Omitting dividend-related withholding: Report any federal or state tax withheld so you receive proper credit and avoid misapplied payments.
Reviewing all forms, verifying dividend classifications, and maintaining accurate investment records help ensure accurate reporting and reduce the risk of IRS discrepancies.
Learn more about how to avoid business tax problems in our guide on How to File and Avoid Penalties.
What Happens After You File
The Internal Revenue Service compares all amounts from Form 1099-DIV with the dividend income and capital gains distributions reported on the tax return. If everything matches, the return process is typically handled; however, any differences may trigger a notice adjusting federal taxes. State tax departments may also review reported amounts when state income tax or foreign tax appears on the form.
FAQs
Why did I receive IRS Form 1099-DIV 2014?
A taxpayer receives IRS Form 1099-DIV 2014 when financial institutions or other financial institutions report dividend income, capital gains distributions, or exempt interest dividends. These amounts must be included on the tax return as taxable income because the Internal Revenue Service verifies all reporting distributions.
Do reinvested dividends count as taxable income?
Yes, reinvested dividend payments from mutual funds, money market funds, or a taxable brokerage account still count as dividend income. These amounts must be reported as ordinary dividends or qualified dividends and may affect future capital gains depending on the taxpayer’s holding period.
What if I received more than one Form 1099-DIV?
A taxpayer must report every 1099-DIV received during the tax year, primarily when multiple accounts exist at a financial institution or mutual fund. Each form may display total ordinary dividends, capital gain dividends, or foreign tax, and failing to complete any form can result in changes to federal taxes.
How do withheld federal and state taxes affect my return?
Any federal income tax withheld or state income tax withheld must be reported on the tax return because these payments reduce the taxes owed. Withholding may occur under backup withholding rules or when the amount of dividends paid reaches certain thresholds. These entries must match all amounts listed on Form 1099-DIV.
Are foreign tax and foreign dividends reported differently?
Yes, foreign tax from a foreign corporation or foreign country may qualify for a credit or deduction depending on Internal Revenue Code rules. Dividends paid by a qualified foreign corporation may qualify for reduced capital gains rates if holding requirements tied to the ex-dividend date are met and are reported correctly.
