Perfect Form

It’s been an exciting 2 months here at Vassey Financial Planning and Investments so let’s keep it going! We’re going to talk about tax forms! Cool your jets. We’re only going to discuss a few, like the ones you might get from investment accounts or retirement accounts. We don’t want to have too much fun!

Let’s start with the most common retirement account tax statements. The least known is Form 5498. It’s an informational form but does provide some important data. It will provide the contribution amounts made in the previous year and can include Required Minimum Distribution amounts. The one most people recognize is a 1099-R. This provides the IRS and you with the amount and type of distributions that were made during a given year from an IRA, pension or various types of annuities. If you receive either or both of these you’ll want to keep them and use them to file your taxes correctly.

Non-qualified (not an IRA, 401(k), etc.) accounts, brokerage accounts or managed accounts have their own 1099 forms and sometimes they can be long. Form 1099-INT lists interest received. This can come from a savings account or something similar as well. Form 1099-DIV will list dividends. Dividends are similar to interest but not quite the same. Dividends can be Qualified and taxed at a different rate than interest or non-qualified dividends. You may also receive a 1099-B. This form reports transactions in a non-qualified account. Transactions are usually taxable events in a non-qualified account and can result in a gain or loss that should be reported on Schedule D of Form 1040. While each form is different they can all come together which makes gathering them much easier.

The best part about paying taxes is knowing the money you’ve paid in will be thoughtfully spent by highly qualified individuals, carefully considering the ramifications and benefits of each dollar. I don’t know if I should laugh or cry that I couldn’t type that with a straight face. Anyway, it’s best to only file taxes once so if you have an advisor, a quick call to make sure you’ve got everything won’t hurt!


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