How Do I Prepare to E-file Form 1099 DIV? Did you pay $600 as dividends to the shareholders in the prior year? then you need to file Form 1099 DIV. As per the IRS norms, 1099 DIV is sent by banks, financial institutions to the investors who receive dividends in a tax year.
Getting confused? Don’t worry! We will let you know how to prepare to e-file IRS 1099 DIV for 2021. We provide you with details of the requirements to file the dividend return form. Furthermore, you will also get to know whether you can file a 1099 information return for free online or not.
Table of Contents
Required Information to E-File Form 1099 DIV Online?
Given the below information is mandatory to file the 1099 DIV Tax Form online:
The person who paid the dividends must provide their name, address, Taxpayer Identification Number, or Social Security Number to file an information return.
Include the recipient details like name, address, and a TIN of the payee correctly. Because filing information with incorrect details may lead to starting backup withholding taxes from the payee.
Provide the dividend and distribution of income information in the correct boxes of Form 1099 DIV.
State Filing Details
Check whether there are any federal/state income taxes withheld previously. Include them when filing the tax returns. Otherwise, the IRS may impose penalties.
How to E-file 1099 DIV Form for 2021?
Here are the steps to e-file the IRS 1099 DIV Form for the tax year 2021:
Create an e-file account
The first step is to submit tax returns online & to create an e-file account. As we know, there are numerous e-file providers to file tax returns online. Among them, choose the one that is IRS authorized by the IRS. Sign up with the e0file provider by providing your name, email address, phone number, and password.
Log in with your credentials
After creating an e-file account, you’ll get the login credentials to the registered email address. Login by providing your email address and password. Already existing users can log in with your credentials with a single click.
Choose “Form 1099 DIV”
Generally, there are numerous 1099 Tax Forms in the 1099 series. So, choose “Form 1099 DIV” to report the dividends and distributions paid to the shareholders or investors.
Key in the details
Provide the necessary details like payer and payee information, dividend, and distribution information correctly.
Review and transmit
Finally, review the form and then transmit it to the IRS within the deadline to avoid penalties and interests.
Who Must File A 1099 DIV?
According to the IRS, you need to file a 1099 DIV Tax Return with each recipient if:
Pay dividends on stocks
When you pay dividends in the form of capital gains, exempt interest, or other distributions of $10 or more on stocks, then you need to file the tax return.
Withheld foreign tax
If you withheld and paid any foreign tax as dividends or other distributions on stocks, then you need to file a 1099 DIV.
Withheld federal income tax
When you withhold any federal income tax on dividends under backup withholding rules, you need to file a 1099 dividend information return.
Pay dividends on liquidation
If you paid $600 or more as dividends as a part of the liquidation, then you need to report the dividends paid by filing a 1099 DIV.
What Are The Common Errors on the 1099 DIV Tax Form?
The most common errors that occur when filing IRS Form 1099 DIV are:
Incorrect amounts or checkboxes
- As we know, Form 1099 DIV is used to report the dividends or distributions paid to an individual or shareholder in a tax period. So, if you enter an incorrect amount of dividend paid, the IRS considers it as error filing and rejects your return. Thus, check whether the amount of dividend paid is entered in the correct box of the form.
- If you didn’t check the FATCA filing requirement box, the IRS treats it as an error filing information return. So, check the box if you’re a payer in the US and report distributions in boxes 1, 3, 9-12. Furthermore, if you are a Foreign Financial Institution and reporting payments to a US account holder check the box.
Invalid payee TIN/details
Generally, you need to provide correct payee information when filing any 1099 information return form. Any incorrect payee information leads to backup withholding taxes on the dividend income. Moreover, if you intentionally include invalid payee details, you may be subjected to a penalty. So, be sure to provide correct payee details to avoid error filing 1099 DIVs.
Can I File My 1099 DIV Online for Free?
As per the IRS rules and regulations, the filer can create a free account online to transmit information returns over the Internet. But you can’t file the 1099 Tax Form online for free. Instead, you need to pay a service fee to the e-file providers for processing tax returns to the IRS. The cost of e-filing depends on the number of tax returns you are filing for a tax period. So, choose the e-file provider that charges nominal rates to transmit 1099 returns to the IRS. Form 1099 Online is the best e-file provider authorized by the IRS and charges genuine rates. Sign up with us for free and pay when you submit tax returns to the IRS.
Ready to e-file 1099 Forms? Form 1099 Online is the best solution. Sign up with us by providing an email address and password and filing multiple tax returns at once for a tax period with a single e-file account.
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