How to Report Taxable Dividends From Stocks

Dividends are distributions given to shareholders by corporations. They can be stock or property but are usually a set amount of cash per share. When you own a dividend-paying stock or mutual fund, you will receive a form 1099-DIV in the mail that specifies the type of dividend and the amount. The total amount of dividends must be reported when you file your federal tax return.

Difficulty: Moderately Easy

Instructions

1. Add up ordinary dividends from form 1099-DIVs received from dividend-paying investments.

2. Write in the total gross dividends on Line 9a of Internal Revenue Service Form 1040 or 1040A. If the amount is above $1,500, you must use IRS Schedule B to report it.

3. Fill in the payer's name on Line 5 of Schedule B and the value of dividends received. Use your brokerage firm's name if you received a Form 1099-DIV from it.

4. On Schedule B, enter the total on Line 6 of all dividends listed on Line 5.

5. Enter qualified dividends (Box 1b from form 1099-DIV) on Line 9b of Form 1040 or 1040A.

Tips & Warnings

• Make sure to give your accurate Social Security number when investing to prevent a penalty.

References

• IRS: Dividends
• Do I Have to Pay Tax on Stock Dividends?
• Investment Income and Expenses

Resources

• IRS Form 1099-DIV
• IRS: 1040 Central