Contributed by: MatthewD, FreeTaxUSA Agent, Tax Pro
The ease of investing through online platforms has grown. With the availability of smartphone apps and online accounts, many more people are investing in the stock market on their own.
If you are independently investing, the statement you get from your brokerage company will likely be a composite or consolidated statement. It will list several 1099 forms, each reporting different types of income.
Your brokerage statement may have the following 1099 forms:
- 1099-B: Proceeds from Broker and Barter Exchange Transactions
- 1099-INT: Interest Income
- 1099-DIV: Dividends and Distributions
- 1099-OID: Original Issue Discounts and Adjustments
- 1099-MISC: Miscellaneous Information
- Section 1256 Contracts 1099-B
A brokerage statement will include details of stock and mutual fund sales, summaries, and other related information. In this article, we will focus on the Form 1099-DIV, Dividends and Distributions section of the statement and how to enter it in FreeTaxUSA.
Above is a sample of the first page of a common brokerage statement. Yours may look a little different, but they all refer to the standardized forms approved by the Office of Management and Budget (OMB). This sample statement includes the following:
- 1099-DIV: Dividends and Distributions
- 1099-MISC: Miscellaneous Information
- Section 1256 Contracts 1099-B
- Summary of the 1099-B’s
You can see all the amounts in the 1099-MISC section are zero, so there’s no 1099-MISC income to report from this statement. On the other hand, if you have a 1099 statement with amounts, like the 1099-DIV above, it must be entered as part of your tax return. Here is the 1099-DIV we will use in our example.
Step 1: Select the Income menu and choose the Investment and Savings option.
Step 2: Select “Add an Investment”, choose the option for Dividends (1099-DIV) then Save and Continue.
Step 3: Enter the name of the Investment Account and continue to the “Enter the dividend…” page. Enter each amount as it corresponds to the 1099-DIV form box numbers and Save and Continue. Answer any questions the software asks on the following pages as they pertain to your situation.
If you have more than one 1099-DIV, continue to the “Your Investment and Savings Account” page and enter each 1099-DIV.
