Taxpayers are expected to provide their tax preparers with various forms showing income from investments, with three of the most common being Form 1099-INT, Form 1099-DIV and Form 1099-B. These forms are not exclusive to medium to high-income earners, as even some lower-income individuals, particularly retirees, may receive them.
It’s important you know how to handle individual clients with a comprehensive understanding of these forms and how the associated information is reported.
Below, you’ll find a few of the top questions from a recent webinar on the topic and their accompanying answers. If you choose to attend the on-demand version of this webinar, you can access the full recording and the entire list of Q&As.
Q: If you have a bond premium, do you list it on the Schedule B as a negative number?
A: Yes, an amortized bond premium is shown as a negative amount on Schedule B.
Q: If you have an inherited stock, is it always long-term holdings?
A: If you inherit stock, it is automatically considered to have been held for longer than one year and any gains are treated as long-term capital gains.
Q: What is the percentage for tax withholding on a Form 1099?
A: Income reported on Form 1099 is generally not subject to withholding, but there are some cases where there is backup withholding that might be reported on the form. The withholding rate is generally.
Q: At what point are long term capital gains taxed?
A: For, up to in capital gains for individual taxpayers (for MFJ) are taxed at 0%.
To learn more about Forms 1099-INT, DIV and B, you can watch our on-demand webinar. NATP members can attend for free, depending on membership level! If you’re not an NATP member and want to learn more, join our completely free 30-day trial at natptax.com/explore.
About National Association of Tax ProfessionalsThe National Association of Tax Professionals (NATP) is the largest association dedicated to equipping tax professionals with the resources, connections and education they need to provide the highest level of service to their clients. NATP is comprised of over 23,000 leading tax professionals who believe in a superior standard of ethics and exemplify professional excellence. Members rely on NATP to deliver professional connections, content expertise and advocacy that provides them with the support they need to best serve their clients. The organization welcomes all tax professionals in their quest to continually meet the needs of the public, no matter where they are in their careers.
The NATP headquarters is located in Appleton, WI. To learn more, visit www.natptax.com.
Information included in this article is accurate as of the publish date. This post is not reflective of tax law changes or IRS guidance that may have occurred after the date of publishing. All taxpayer circumstances are different, and NATP recommends contacting research services if you have specific questions about your clients’ tax situations.