TAX TIP No. 17
Be on the lookout for these tax statements
The good thing about capital gains distributions and dividends is that, in most cases, they are eligible for the lower rates that apply to capital gains. Be sure to read the 1099-DIV and tax return instructions for guidance on how to report and figure taxes on the varying dividend and capital gains amounts.
If you sold stocks, bonds or mutual funds,
you will receive a 1099-B from your broker
or mutual fund company. This will tell you
the number of shares sold, when they sold
and the amount you got for the sale. You'll
need this information, along with the date
you bought the shares and the amount you paid
for them, to figure your taxes.
Taxpayers who got a refund of state or local taxes last year will get this form. If you used those taxes as a deduction on your previous year's federal income tax return, you'll need to report the 1099-G amount on this year's return. You don't have to worry about reporting this refund as income, however, if you took the standard federal deduction instead of itemizing.
If you were out of work for a while last year and collected unemployment, you'll get a separate 1099-G showing those payments.
Sorry, unemployment benefits are taxable income.
If you received a pension or a distribution from an individual retirement account or retirement plan, the 1099-R provides the details of these transactions. The form is issued by your broker, pension plan manager or mutual fund company. You'll also get a 1099-R if you rolled over money in a retirement plan, usually a 401(k) to an IRA, or if you converted a traditional IRA to a Roth IRA. A rollover usually is not a taxable event, but a pension payout may be.
Self-employed individuals who earned $600 or more should get a 1099-MISC from the employer. You should get a separate 1099-MISC for each independent job you had during the previous tax year.
There are a couple of statements you might need for your tax records, but because of the intricacies of the financial arrangements they cover, the documents do not always arrive before the April filing deadline.
Any contributions made during the calendar year to any individual retirement accounts are reported on this form. The 5498 shows traditional IRA contributions that might be deductible on your tax return, as well as any rollovers, including a direct rollover to a traditional IRA, made during the last tax year. It also reports amounts recharacterized from one type of IRA to another. It notes any amounts converted from a traditional IRA, simplified employee pension or savings incentive match plan for employees to a Roth IRA.
Because these savings plans allow contributions up until the April 15 tax filing deadline, Form 5498s for these accounts aren't due to taxpayers until May 31. You should, however, get a statement of each account's fair market value in early February. You don't need it to file your return, but keep it for your records. It will be helpful when you begin taking money out of these accounts and need to calculate any taxes.
|-- Updated: Jan. 28, 2009