What is Form 1099-B?
Form 1099-B, an important US tax document, is used to report income, particularly from the sale of securities, such as stocks, bonds, or mutual funds. Financial institutions, brokers, or barter exchange networks issue this form.
Who needs to file Form 1099-B?
Individuals and entities that engage in the sale of securities or other reportable transactions must file Form 1099-B to report those transactions to the Internal Revenue Service (IRS) and provide copies to the parties involved in the transaction.
When to file Form 1099-B?
- E-filing with the IRS: The due date is April 1 if you are filing electronically.
- Paper filing with the IRS: The due date is February 28 for the previous tax year’s transactions.
- Sending to the recipient: You must send Copy B to the recipient by February 15.
Remember, if any of these dates fall on a weekend or legal holiday, the deadline is the next business day.
Why is Form 1099-B important?
Form 1099-B is important for tax reporting, aiding the IRS in tracking capital gains and losses from the sale of securities. This information is used to calculate an individual or entity’s taxable income.
Are there any deadlines or times for when this form is needed?
Yes, the deadline for filing Form 1099-B with the IRS by mail is February 28th and electronically is April 1st. The deadline to send to the recipients is February 15th. This deadline is crucial to avoid penalties for late filing.
You’ll generate at least 5 copies of the form:
- Copy A – Sent to the IRS by the broker or barter exchange.
- Copy B – Given to the recipient (the individual who sold the asset).
- Copy C – Retained by the broker or barter exchange for their records.
- Copy 1 – If applicable, sent to the recipient’s state tax department.
- Copy 2 – To be filed with the recipient’s state income tax return, if required by the state.
So, typically, a total of 5 copies can be generated for Form 1099-B, though not all might be used depending on the circumstances. Always refer to the specific instructions related to the form for the most accurate and updated information. For filing by mail, Copy A must be printed in a special type of red ink that is scannable. Paper forms can be ordered directly from the IRS website. Complete and generate IRS Form 1099-B on FormPros for distributing copies to recipients.
How do I submit Form 1099-B to the Government?
Form 1099-B can be filed electronically through the IRS’s e-file system, or it can be submitted by mail along with the appropriate transmittal form.
How to distribute 1099-B form to taxpayers and where and when to retrieve them.
Distribution to Taxpayers:
- Paper Copy: Brokers or barter exchanges must send the paper copy of Form 1099-B to the taxpayer by February 15 of the year following the tax year in which the transactions occurred.
- Electronic Copy: The taxpayer may consent to receive their 1099-B electronically, and the broker or barter exchange may provide it through a secure website or email as per the taxpayer’s preference.
Retrieval by Taxpayers:
- Taxpayers can retrieve their Form 1099-B from their broker or barter exchange. Many institutions provide these forms through their online platforms, allowing for easy access and download.
What are the main things that go on Form 1099-B?
Form 1099-B includes information such as the taxpayer’s name, address, Social Security Number or Taxpayer Identification Number, the description of the property sold, date of sale, proceeds from the sale, and cost basis.
What are the most common mistakes to avoid?
Common mistakes when filling out Form 1099-B include incorrect or missing taxpayer identification numbers, miscalculating proceeds and cost basis, and missing the filing deadline.
Do I need to use a lawyer, accountant, or notary to help me?
While you can fill out Form 1099-B on your own, it is advisable to seek assistance from a tax professional, especially if you have complex transactions or are unsure about the reporting requirements.
What are the step-by-step instructions to complete Form 1099-B?
Boxes 1a to 1g describe the item/service, dates, proceeds, and costs related to the transaction.
Box 2 indicates if the gain/loss is short-term, long-term, or ordinary.
Box 3 identifies collectible transactions or those from a Qualified Opportunity Fund.
Box 4 shows backup withholding due to missing TIN.
Box 5 identifies non-covered securities.
Boxes 6 & 7 relate to option transactions and restrictions on loss claims.
Boxes 8 to 11 deal with futures, foreign currency, or Section 1256 option contracts.
Box 12 signifies if the basis has been reported to the IRS and if there’s a potential gain/loss.
Box 13 shows barter exchange values.
Boxes 14–16 provide state/local tax details.
What is the easiest way to create Form 1099-B?
The easiest way to create Form 1099-B is to use tax software or an online tax filing service, which will guide you through the process and ensure accurate reporting.
Why use our Form 1099-B generator?
Our Form 1099-B generator simplifies the process of creating accurate and compliant 1099-B forms. It provides a user-friendly interface, ensures you fill out all necessary fields correctly, and generates the required copies for submission to the IRS and recipients.
Form 1099-B FAQs
What is the primary purpose of Form 1099-B?
Form 1099-B is used by brokers and barter exchanges to report the sale or exchange of securities, commodities, futures contracts, and other barter exchange goods to the IRS and to the seller.
What are the specific types of transactions reported on this form?
The form reports the sale of stocks, bonds, futures, commodities, regulated futures contracts, foreign currency contracts, forward contracts, debt instruments, and options.
Is there a minimum amount required for a sale to be reported on Form 1099-B?
Yes, for most transactions, only sales resulting in proceeds of $600 or more need to be reported. However, it's essential to consult current IRS guidelines for any changes.
What if I received a Form 1099-B with incorrect information?
If you believe the information on the Form 1099-B you received is incorrect, contact the broker or barter exchange that issued it and request a corrected form.
Are there any specific codes associated with Form 1099-B?
Yes, brokers may use certain codes in Box 1f to specify the type of adjustment, if any. It's essential to refer to the IRS's instructions for Form 1099-B to understand these codes fully.
How do I report losses or gains from the sales reflected on Form 1099-B?
The gains or losses from the sales reported on Form 1099-B are typically reported on Form 8949 and Schedule D of your individual income tax return.
If I have multiple transactions, do they all go on one Form 1099-B?
A broker or barter exchange may issue a single Form 1099-B that consolidates all transactions, or they might issue separate forms for distinct types of transactions.
How do I handle discrepancies between the cost basis reported on Form 1099-B and my records?
If there's a discrepancy between the cost basis reported on Form 1099-B and your records, you should adjust the amount on Form 8949 and provide an explanatory code or statement.
Are there any implications if I receive a Form 1099-B as a nominee?
If you received a Form 1099-B as a nominee for the actual seller, you must file a Form 1099-B to report the sale to the IRS and furnish a statement to the real owner.
What if I don’t receive a Form 1099-B but have had reportable transactions?
Even if you don't receive a Form 1099-B, you're still required to report all of your taxable transactions to the IRS.