Tax Reporting: About Forms 1099
Forms 1099 are a series of U.S. tax information returns which report income earned as interest, dividends, proceeds from securities and commodities sale transactions, and other reportable payments posted to your account during a calendar year. These reports, which are supplied to the IRS, provide information, which should be used in preparing your tax return. For example, dividends and interest, are reported on IRS Form 1040, "U.S. Individual Income Tax Return", Schedule B. Sales transactions are to be reported on IRS Form 1040, "U.S. Individual Income Tax Return", Schedule D.
Information on reporting gains and losses, including determining the cost basis, can be obtained by reading IRS Publications 544, "Sales and Other Dispositions of Assets", and 551, "Basis of Assets." We recommend you consult your tax professional with specific questions.
All of the IRS forms and publications referenced above are available online at www.IRS.gov/formspubs
In compliance with Treasury Department Circular 230, unless stated to the contrary, any information contained in this FAQ was not intended or written to be used and cannot be used for the purpose of avoiding tax penalties that may be imposed on any taxpayer.
Tax: UK Persons and Entities: W-8 Forms for Non-US Residents
You must complete a Form W-8 because the entity holding your client money is Interactive Brokers LLC, in the US.
In compliance with Treasury Department Circular 230, unless stated to the contrary, any information contained in this FAQ was not intended or written to be used and cannot be used for the purpose of avoiding tax penalties that may be imposed on any taxpayer.
Tax: Canadian Persons and Entities: Form T5008
Canadian Slip T5008, Statement of Securities Transactions, contains proceeds and cost information, but capital gains/losses are not reported.
In compliance with Treasury Department Circular 230, unless stated to the contrary, any information contained in this FAQ was not intended or written to be used and cannot be used for the purpose of avoiding tax penalties that may be imposed on any taxpayer.
Tax: Canadian Persons and Entities: Tax Form Availability
T5008 and T5 forms are available on February 28th.
The T3 forms are generally available on March 31st. Some T3s may be made available after this date if the information is received late. You should always try to match the available T3s with the distributions received as shown on your dividend report or account statements.
NR4s will be available March 31st.
In compliance with Treasury Department Circular 230, unless stated to the contrary, any information contained in this FAQ was not intended or written to be used and cannot be used for the purpose of avoiding tax penalties that may be imposed on any taxpayer.
Tax Reporting: Unrealized Capital Gains Distributions from Regulated Investment Companies (RICs) and Real Estate Investment Trusts (REITs)
These gains are reported on Form 2439 in Box 1a. There may be tax paid on your behalf by the RIC or REIT; this tax is reported to you on Form 2439 in Box 2.
In compliance with Treasury Department Circular 230, unless stated to the contrary, any information contained in this FAQ was not intended or written to be used and cannot be used for the purpose of avoiding tax penalties that may be imposed on any taxpayer.
Tax Reporting: Understanding Qualified Dividends
Qualified Dividends are distributions which meet the criteria to be subject to a beneficial federal tax rate. In general, qualified dividends are distributions received from U.S. Domestic corporations or qualified foreign corporations where you have owned the investment for more than 61 days before or after the ex dividend date. IRS Publication 550 “Investment Income and Expenses” available free on line at www.IRS.gov and/or your tax professional can assist in determining if your dividends are eligible for the beneficial rate.
In compliance with Treasury Department Circular 230, unless stated to the contrary, any information contained in this FAQ was not intended or written to be used and cannot be used for the purpose of avoiding tax penalties that may be imposed on any taxpayer.
Tax Reporting: Understanding Ordinary Dividends
Dividends are paid by corporations, mutual funds, money market funds, and other entities such as REITs. Ordinary dividends include payments from foreign securities such as ADRs and foreign companies and net short-term gains from mutual funds. Dividends that have been reinvested are also included in this amount.
In compliance with Treasury Department Circular 230, unless stated to the contrary, any information contained in this FAQ was not intended or written to be used and cannot be used for the purpose of avoiding tax penalties that may be imposed on any taxpayer.
Tax Reporting: I already filed my taxes and have received a Corrected Form 1099. What do I do now?
You will have to file an amended tax return to report the information as reported on the corrected Form 1099. As the IRS verifies the information on your tax returns with the 1099s received from banks, brokers and other sources, you may receive a notice from the IRS indicating that your return was filed using incorrect information. Consult your tax or legal advisor for further information.
In compliance with Treasury Department Circular 230, unless stated to the contrary, any information contained in this FAQ was not intended or written to be used and cannot be used for the purpose of avoiding tax penalties that may be imposed on any taxpayer.
Tax Reporting: Withholding on IRA Distributions in Connection with Rollover
We are required to apply 20% withholding tax from IRA distributions, unless your IRA rollover is sent directly account to account. Box 4 of the 1099-R reports any withheld taxes. Please note that for any tax deferred account rollover on which taxes have been withheld, the full amount (including the taxes) must be re-deposited into a tax-deferred account within 60 days for the transaction to be income tax free.
In compliance with Treasury Department Circular 230, unless stated to the contrary, any information contained in this FAQ was not intended or written to be used and cannot be used for the purpose of avoiding tax penalties that may be imposed on any taxpayer.
