Form 1099-DIV, Dividends and Distributions is a report sent to investors who receive income from any type of investment during the given year. The form is required to be sent by banks, investment companies, and other financial institutions by the January 31st of every year. This form is also required to be sent to the Internal Revenue Service (IRS) regardless of the amount the taxpayer receives from these type of investments.

Individuals that receive more than $10 from dividend and/or distributions will be issued a Form 1099-DIV and the information must be either entered onto a Schedule B form or directly onto Form 1040. The form covers more than just stocks and bonds, it also includes mutual funds and money market funds. The document states the amounts of the dividends and/or distributions and the types of income consumer have earned from these investments. It should be mentioned that 1099-DIV forms can also monitor any and all capital gains as well.

Virtually any type of dividend income received will be reported on form 1099-DIV including interest, real estate, hedge funds, and other investments. Investors are required to list the name of the company paying the dividend and any federal income tax withheld on the form. The investor must also pay the taxes due on these earnings and associated forms must be used to report these payments.

It is important to remember that 1099-DIV forms are only sent to taxpayers when the amount earned by dividends is greater than $10 in a given calendar year. Unfortunately, income of less than $10 is non- taxable and non-reportable, but any sum more than the cutoff number must be properly reported. Keeping careful records of investments and their earnings is essential for accurate compliance with IRS regulations.

In short, Form 1099-DIV, Dividends and Distributions is an important tax document. It not only helps taxpayers report their dividend income, but also keeps them in compliance with government regulations. The form also helps banks and other financial institutions inform the IRS of individuals’ dividend earnings for the year. Without it, financial institutions and investors would be left to use their own records and calculations when filing taxes.