I have an employee stock plan account and made ~$60 in dividends last year, I didn’t sell anything so I don’t have any realized gains or losses, do I need to wait for a 1099 from the company to file my taxes and report the dividends? Could I also just look at account activity and report dividends from that instead of waiting for the 1099?
Do I need to report dividends from my employee stock account
byu/Straight-Mistake6999 intax
Posted by Straight-Mistake6999
5 Comments
You should be sent a 1099-DIV, and yes, regardless of whether you get 1099-DIV, you must report the dividends.
This assumes it’s a regular taxable employee stock account, and you’re not referring to a retirement plan like a 401k.
you have to report dividends. 1099 is just a convenience, but you can use your account activity to report instead.
One thing I find helpful is the 1099-DIV differentiates between Ordinary Dividends and Qualified Dividends. I pay a different tax rate on Qualified Dividends.
The brokerage that holds your ESPP shares should send you a 1099-DIV. I am hoping you have access to an account with them where you can get a complete transaction history. As has been pointed out – the 1099-DIV should give you all the information about how to report the dividend ( qualified or not ) – I do not see why they would not send one
Best practice is to await receipt of all information returns for which payers are required to furnish a copy to you of what they report to taxing authorities. If there’s a discrepancy, it’s far better for you to sort it out with the payer prior to filing your returns and, if you cannot do so, to strategize how to present matters on your returns to avoid an AUR notice while achieving your correct tax liability.
Depending on one’s investments, it may also be advisable to extend filing to provide additional time to receive corrected returns. For some taxpayers it seems that they receive corrected returns from brokerages just about every year because a few issuers advise them of errors in their previously submitted data that necessitate correction of the returns by the brokerages. Who wants to incur the hassle of amending returns if a bit of timing strategizing can minimize the likelihood of needing to do so?