If you received any income from stocks, capital gains or mutual funds during the tax year you can expect to receive a Form 1099-DIV. Below is a listing of what each box on Form 1099-DIV represents.
- Box 1a: This box will include the fully amount of ordinary dividend payouts.
- Box 1b: This box will include the amount of qualified dividend reported from Box 1a.
- Box 2a: This box reports income from Capital Gains from mutual fund investments.
- Box 4: This box will report any federal taxes withheld from distributions.
- Box 14: This box will report any state taxes withheld.
Qualified and Ordinary Dividends
By doing a little math and subtracting the amount of qualified divided shown in Box 1b from the amount of ordinary dividends in Box 1a you can figure own the amount of dividends that will be taxed at ordinary rates.
Any qualified dividends are taxed as long-term capital gains. Your dividends will not be taxed if your largest tax bracket is 15%. Otherwise if your marginal tax rate is more than 15% qualified dividends will be taxed at rates from 15%, 20% or 23.8% depending on your total annual income.
To be considered qualified dividends the funds must be paid by a United State corporation and you must have owned the stock longer than 60 days. There may also be other requirements.
Mutual Funds
If you have any amount in box 2a, mutual fund distributions, it is consider a long term capital gain. Taxes that apply to qualified dividends will also apply to distributions of mutual fund capital gains, but there is no requirement for how long you owned the investment.
Schedule B
You may also have to complete and file a Schedule B if you have received a 1099-DIV for your
