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.
