How Do I Report This 1099-DIV From My Mutual Fund?

Dividends you receive from your mutual fund are taxable, even if you receive additional shares in lieu of cash. When dividends are paid out to you, you’ll receive a 1099-DIV at the end of the year that lists your dividend income information. Your brokerage also provides this information to the Internal Revenue Service. The tax rate on your dividends varies, and depends on the type of dividend paid out to you.

Step 1

Look at Box 1a on your 1099-DIV form. Report the amount on line 9a of your tax return. This box represents the total amount of ordinary dividends you received from the mutual fund. These dividends are subject to your ordinary income tax rate, or the income tax rate assigned to the sum of your taxable income from all sources.

Step 2

Look at Box 1b on your 1099-DIV form. Report the amount shown on line 9b of your tax return. Amounts shown in Box 1b of your 1099-DIV can be classified as qualified dividends. In most cases, these dividends are subject to the capital gains tax rate, which is often lower than your ordinary income tax rate. However, in some cases, qualified dividends might not receive the special rate. This occurs when you sell your shares on a date that is within 60 days before or 60 days after the ex-dividend date. If this instance, you must use the “Qualified Dividends and Capital Gain Tax Worksheet” to determine if you qualify for the special rate. This worksheet is available in the 1040 instructions on the IRS.gov website.

Step 3

Report your dividends on Schedule B. If your total ordinary dividends received equals more than $1,500, you must itemize the dividends on IRS Schedule B and send the form with your tax return.

About the Author

With a background in taxation and financial consulting, Alia Nikolakopulos has over a decade of experience resolving tax and finance issues. She is an IRS Enrolled Agent and has been a writer for these topics since 2010. Nikolakopulos is pursuing Bachelor of Science in accounting at the Metropolitan State University of Denver.

Zacks Investment Research

is an A+ Rated BBB

Accredited Business.