Investment Tax Forms: What To Expect

Filing taxes can be a dizzying exercise. Even if you hire a tax preparer, you need to know what tax forms you should expect for this tax year. Here are common Internal Revenue Service (IRS) tax forms relating to investments.

In this article

  • What is an IRS 1099 form?

  • Who receives a 1099 form?

  • What if I made a Qualified Charitable Distribution (QCD) last year or had a rollover?

  • What is an IRS 5498 form?

What is an IRS 1099 Form?

The 1099 form is a series of documents the Internal Revenue Service (IRS) refers to as “information returns.” There are a number of different 1099 forms that report the various types of income you may receive throughout the year.

For Taxable (non-retirement) Accounts

Forms to expect: 1099-DIV and/or 1099-INT. Investment custodians, such as TD Ameritrade, often issue Consolidated 1099’s which combine the 1099-DIV and 1099-INT into one form.

Who should expect it: Those who own a taxable (non-retirement) account often registered to an Individual, Joint Tenants, or under a Trust

When to expect it: Generally in February, but these forms are frequently revised in the weeks that follow. If you receive a corrected or revised 1099, be sure to provide the updated form to your tax preparer.

What income information does it include: Dividends, Capital Gains, Interest, etc. produced within your investment account in the tax year.

tax forms to expect for 2021
1099-DIV and 1099-INT are often consolidated into one form by custodians

For Retirement Accounts

Form to expect: 1099-R

Who should expect the form: Those who have taken withdrawals from a qualified retirement account, such as an IRA, Roth IRA, 401(k), 403(b), etc.

When to expect it: Generally in February

What income information does it include: Withdrawals you’ve taken from your qualified retirement account in the tax year. If you did not take withdrawals from your qualified retirement account, you will not receive a 1099-R.

However, there are a few common instances in which you will receive a 1099-R but do not need to report any taxable income:

60-Day Rollover/Indirect Rollover: If you rolled over a retirement plan and took possession of the money, such as a direct deposit into your bank account or a check made payable to you personally, you will still receive a 1099-R. Additionally, if you’ve completed a 60-day rollover, as some people do for a short-term ‘bridge loan,’ you will also receive a 1099-R. However, as long as the funds were deposited before the deadline back into a qualified retirement account, such as an IRA, income should not be taxable. Direct rollovers will also produce a 1099-R, but should include a “code” identifying its non-taxable nature.

Qualified Charitable Distributions (QCDs): If you are age 70 ½+ and gave money directly to charity from your IRA, your 1099-R will NOT differentiate this money. You should only need to pay taxes on the amount of withdrawals that were not given directly to a charity. Many retirees make the mistake of not notifying their tax preparer how much of their withdrawals were given directly to charity, which makes the QCD tax saving strategy useless! More on QCDs here: Giving Mandatory IRA Distributions Directly to Charity Just Got Better

qualified charitable distribution (qcd) does not show up on 1099-r
Qualified Charitable Distributions (QCD) are not differentiated on your 1099-R!

Retirement Contributions

Form to expect: 5498

Who should expect it: Those who made contributions to an IRA, Roth IRA, SEP IRA, or SIMPLE IRA for the tax year.

When to expect it: No later than May 31st

What information does it include: How much you contributed to retirement accounts, not funded through payroll deduction, for tax year. This is simply an informational form and is not required to file your taxes.

form 5498 does not need to be filed with tax return
Form 5498 is just an informational form and should be kept for your records

As with all tax matters, consult your tax professional. The issues discussed here require specific guidance and are more detailed than what this summary provides. The aforementioned is not tax advice.