What is 'Form 1099-DIV'

Form 1099-DIV is a form sent to investors who have received distributions from any type of investment during a calendar year. Investors can receive multiple 1099-DIVs. Each Form 1099-DIV should be reported on an investor’s tax filing.

BREAKING DOWN 'Form 1099-DIV'

Form 1099-DIV is one of many 1099 forms an individual may accumulate for a given tax year. Investors may receive numerous 1099-DIV forms since they are provided by each platform where an investor has investment holdings.

Investment platforms are required to provide a 1099-DIV by January 31 each year. Companies provide a copy of the Form 1099-DIV to the investor and the IRS. Certain types of investment accounts are exempt from issuing a Form 1099-DIV. Exempt accounts include individual retirement accounts, money purchase pension plans, profit-sharing plans and various other retirement accounts. Investors typically will not receive a 1099-DIV if cumulative dividends are not greater than $10.

1099-DIV Categories

Most investors receiving a Form 1099-DIV will have ordinary dividends, qualified dividends or total capital gains. Other categories for investors include: unrecaptured section 1250 gain, section 1202 gain, collectibles gain, nondividend distributions, federal income tax withheld, investment expenses, foreign tax paid, foreign country or U.S. possession, cash liquidation distributions, noncash liquidation distributions, exempt-interest dividends, specified private activity bond interest dividends and state tax withheld. Investors may also be subject to FATCA filing requirements for foreign accounts. A copy of Form 1099-DIV for 2018 can be found here.

Tax Filing

Investors will need to file each 1099-DIV they receive on their annual tax form. This can be done on a Schedule B or directly on the Form 1040. Dividends are taxed at an investor’s income tax rate with a few exceptions. Qualified dividends are the primary exception. Qualified dividends have met certain criteria that allow them to be taxed at a lower tax rate.

The tax rate on capital gains may also vary from the ordinary income tax rate. Short-term capital gains are taxed at the ordinary income tax rate, but long-term capital gains will pay lower taxes. (See also: Comparing Long-Term vs. Short-Term Capital Gains Tax Rates.) Charles Schwab provides a breakdown of the 2017 tax rates for distributions here.

U.S. Tax Reform

U.S. tax reform legislation has enacted many new tax changes for both corporations and individuals in 2018. Tax brackets and rates can be found here. Legislation for tax rates in 2018 does not include any major changes to capital gains and dividends.

RELATED TERMS
  1. Gross Dividends

    Gross dividends are the sum total of all dividends received, ...
  2. Form 2439: Notice to Shareholder ...

    Form 2349 is an IRS form that mutual funds must send shareholders ...
  3. IRS Publication 564: Mutual Fund ...

    IRS Publication 564: Mutual Fund Distributions is a publication ...
  4. Liquidating Dividend

    A liquidating dividend is a type of payment that a corporation ...
  5. Effective Tax Rate

    The effective tax rate is the average rate at which an individual ...
  6. Tax Reform Act Of 1986

    The Tax Reform Act of 1986 is a law passed by Congress that reduced ...
Related Articles
  1. Investing

    In Which Account Should Corporate Bonds Be Held?

    Is it always best to put your corporate bonds in a tax-deferred account? Maybe not.
  2. Financial Advisor

    Income tax on mutual funds: The basics

    Learn about the basics of income tax on mutual funds, including what types of income may be subject to the capital gains tax rate.
  3. Taxes

    Understanding taxation of foreign investments

    Find information on taxation of foreign investments. Learn how the foreign tax credit enables you to deduct most of the tax you've paid abroad.
  4. Taxes

    Comparing Long-Term vs. Short-Term Capital Gains Tax Rates

    A firm understanding of the difference between the taxation of long- and short-term capital gains is crucial to ensuring the benefits of your investment portfolio outweigh the costs.
  5. Insights

    6 Tax Forms for Investors Who Have Money Abroad

    If you're a U.S. citizen or resident, and you own assets in other countries, you might need to file these six forms with the government.
  6. Retirement

    Will You Pay Social Security Taxes After Retirement?

    Social Security taxes are paid regardless of age, but paying taxes on SSA benefits depends on MAGI.
  7. Taxes

    What's IRS Form 1040 For?

    Most U.S. taxpayers will be familiar with the 1040. By the end of filling it out, you'll know how much tax you owe, or what your refund is.
  8. Retirement

    Retirement Plan Tax Form 5329: When to File

    Read this if you've taken early distributions or owe excess-contribution or excess-accumulation penalties.
  9. Taxes

    How the GOP Tax Bill Affects You

    Here's how the new tax bill changes the taxes you file in 2018.
RELATED FAQS
  1. Are qualified dividends included in ordinary dividends?

    Qualified dividends are included with ordinary dividends in Box 1a of the Internal Revenue Service Form 1099-DIV; the box ... Read Answer >>
  2. If I reinvest my dividends, are they still taxable?

    If you reinvest your dividends, you still pay taxes as though you received the cash. Stock dividends are generally not taxable ... Read Answer >>
  3. Is there a difference between capital gains and dividend income?

    Selling something for a profit leads to capital gains. A payment made by a corporations to stockholders is a dividend. Both ... Read Answer >>
Trading Center