Tax Facts

Reporting Your Dividends and Capital Gains

Now that the October 15th extended deadline has passed, it's time to settle in, be thankful for all this year has brought forth and prepare for a new beginning in 2015. With that comes my favorite time of the year: tax season. I look forward to helping people understand their taxes and preparing their tax returns.

In doing so, I remind clients about reporting of the 1099-DIV. If the total of your ordinary dividends (recorded in Box 1a of the 1099-DIV) exceeds $1,500, you must list each source of your ordinary dividend income on Schedule B of Form 1040.

With regard to capital gains and losses, you must report total capital gains (Box 2a) from your taxable mutual fund accounts on Schedule D of Form 1040, unless both of these exceptions apply: 1. The only amounts you have to report on Schedule D are capital gains from Box 2a of your Forms 1099-Div and 2. None of your Forms 1099-DIV have an amount in Box 2b, Box 2c, and Box 2d.

If that's the case, then you only need to enter your total capital gains from all your taxable investments on Line 13 of Form 1040 and check the box on that line. With that, you must complete the Qualified Dividends and Capital Gain Tax Worksheet included in the Form 1040 instructions to determine your tax liability on the amounts reported.

If that's all Greek to you, let me know.  Especially as the year winds down, I enjoy answering questions and researching the ever-changing tax law landscape.

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