Intro to Tax Forms
When you have a "taxable event" in your brokerage account, you'll receive a tax form. For individual, joint, and custodial accounts, a "taxable event" usually happens if you sell anything, or if you receive dividends totaling at least $10 for the tax year. There are other things that can trigger a tax form, but those are by far the most common. In reality, your consolidated 1099 tax form is made up of four forms:
Here, you'll find proceeds from sales and other closing transactions. Starting with stocks you purchased in the 2011 tax year, cost basis is included along with your proceeds.
Any interest paid in your account during the year.
Any dividends and capital gains distributions received from your stocks, mutual funds, or money market funds.
Any miscellaneous income, such as income earned from a Royalty Trust.
This form reports interest income earned as a result of an Original Issue Discount (OID). An OID occurs when a debt instrument's stated redemption price is more than its issue price.
Tax Forms for Limited Partnerships
If you own interest in a publicly traded Master Limited Partnership, you'll receive tax information directly from the partnership on an IRS Schedule K-1 (Form 1065). General Partners have until April 15 to issue a Schedule K-1. TIP: If you don't receive this form, you should contact the partnership directly. Most partnerships have contact information on their website.
IRAs & ESAs get two different forms
Tax forms for IRAs (Individual Retirement Arrangement) and ESAs (Education Savings Accounts) are different than those of other accounts.
- 1099-R or 1099-Q - distribution
The 1099-R (IRA)/1099-Q (ESA) are used to report any distributions (aka withdrawals) taken from your account during the previous year. These forms are available by January 31 ONLY if you took a distribution during the tax year.
- 5498 Form - contributions
The 5498 (IRA)/5498-ESA is used to report any contributions (aka deposits) you made to this account for the previous tax year. This form is available at the end of May if you made a contribution. You don't need these forms for filing your taxes the year that you receive them, but they're your official record of your annual contributions.
TIP: If you didn't make any contributions or distributions during the reporting period, you may not receive either form. Check your Year End Statement for more information.