What to Do If Your 1099-DIV or 1099-B Has Errors

Navigating tax season can be daunting, especially when faced with errors on crucial taxation documents like Form 1099-DIV or 1099-B. These forms are pivotal in reporting dividend income and capital gains or losses, as they are essential information returns, and inaccuracies can lead to complications with the IRS. Here’s an empowering guide to help you address these errors with confidence and ease.

Key Takeaways

Errors on Form 1099-DIV or 1099-B can result in inaccurate tax filings and potential IRS penalties.
Promptly contacting the payer or issuer is essential for obtaining account revisions and corrections.
The IRS provides procedures for addressing issues if the issuer fails to correct errors.

Understanding 1099-DIV and 1099-B

Form 1099-DIV is used to report dividends and distributions from investments, while Form 1099-B records proceeds from broker transactions, such as selling stocks or mutual funds. Accurate reporting and compliance on these forms is crucial because the IRS receives a copy of this information directly from the issuer. Missteps here can lead to discrepancies that may trigger unwanted attention from the IRS.

Common Errors on 1099-DIV and 1099-B

Errors on these forms can occur for various reasons, including:

Incorrect or missing amounts for dividends or distributions.
Misreported cost basis or sales proceeds.
Typographical errors in the taxpayer’s Social Security Number (SSN) or Taxpayer Identification Number (TIN).
Missing information on adjusted cost basis for capital gains.

Steps to Address Errors on Your 1099-DIV or 1099-B

1. Double-Check Your Records

Before reaching out to the issuer, verify the error by comparing the form to your own records, including brokerage statements and transaction histories. This ensures the discrepancy isn’t a misunderstanding and provides you with a solid foundation for your claim.

2. Contact the Issuer

The financial institution or brokerage that issued the form is responsible for ensuring compliance and correcting errors. Here’s how to proceed:

Act Quickly: Contact the issuer as soon as you identify the issue. Time is of the essence to prevent delays in your tax filing.
Provide Documentation: Share supporting documents such as transaction statements to substantiate your claim. This evidence is crucial in facilitating a swift resolution.
Request a Corrected Form: If the issuer acknowledges the mistake, they should issue a corrected form marked as “Corrected.”

3. Wait for the Corrected Form

If a corrected form is issued, wait to file your taxes until you receive it. Submitting your tax return with incorrect information can trigger IRS penalties or delays in processing. Patience here can save you from future headaches.

4. File a Form 8949 for Adjustments

In some cases, you might need to report adjustments yourself. Use Form 8949, Sales and Other Dispositions of Capital Assets, to reconcile discrepancies in amounts reported on Form 1099-B. This form allows you to detail any adjustments and ensure your tax return reflects accurate information.

5. Notify the IRS If Corrections Are Not Made

If the issuer refuses to correct the form, inform the IRS directly:

Attach a written explanation and documentation supporting your claim to your tax return.
Include Form 4852, Substitute for Form W-2, Wage and Tax Statement, if necessary, to replace a missing or incorrect form.

Avoiding Future Issues

Here are some proactive steps to prevent errors on your tax forms in the future:

Update Your Information: Ensure that your broker or financial institution has your current SSN, TIN, and contact details. Keeping your information up-to-date can prevent many common errors.
Track Investments Carefully: Maintain accurate records of your transactions, dividends, and distributions. This diligence can serve as a valuable reference point during tax season.
Review Statements Regularly: Monitor your brokerage and investment account statements throughout the year to catch errors early. Regular reviews can help you spot discrepancies before they become problematic.

Real-Life Example: Correcting a 1099-B Error

Imagine Sarah, an investor who sold shares of a mutual fund in December. When she received her 1099-B, she noticed the cost basis was incorrect, overstating her capital gain. Sarah contacted her brokerage, provided her transaction history, and requested a corrected form. The brokerage promptly issued a corrected 1099-B, saving Sarah from overpaying her taxes. This scenario underscores the importance of vigilance and prompt action.

Consequences of Ignoring Errors

Failing to address errors on your 1099-DIV or 1099-B can lead to:

IRS Audits: Discrepancies between what you report and the IRS records can trigger an audit, leading to further scrutiny of your financial affairs.
Penalties and Interest: Incorrect tax filings may result in fines or additional interest on underpaid taxes, impacting your financial well-being.
Delays in Refunds: If you’re owed a refund, filing an incorrect return can delay its processing, affecting your cash flow.

Accurate tax reporting is essential to maintaining your financial health and staying compliant with the IRS.

Navigating Tax Season with Confidence

Errors on your 1099-DIV or 1099-B can feel overwhelming, but addressing them promptly can save you time, money, and stress. By following these steps and maintaining thorough records, you’ll navigate tax season with confidence and accuracy. If you’re unsure about handling a complex issue, consulting a tax professional is always a wise decision. Remember, taking control of your financial narrative empowers you to face tax season with optimism and assurance.

Want a Faster Way to File Your Tax Extension?

eFile your federal Personal or Business Extension in just 5 Minutes! The eFile process includes 24/7 live support and immediate IRS approval. Start today and be done in minutes.

Get Started

Common 1099-DIV and 1099-B Errors Explained and Solutions

What to Do If Your 1099-DIV or 1099-B Has Errors

Key Takeaways

Understanding 1099-DIV and 1099-B

Common Errors on 1099-DIV and 1099-B

Steps to Address Errors on Your 1099-DIV or 1099-B

1. Double-Check Your Records

2. Contact the Issuer

3. Wait for the Corrected Form

4. File a Form 8949 for Adjustments

5. Notify the IRS If Corrections Are Not Made

Avoiding Future Issues

Real-Life Example: Correcting a 1099-B Error

Consequences of Ignoring Errors

Navigating Tax Season with Confidence

Want a Faster Way to File Your Tax Extension?

Pages

Useful Pages

Useful Pages

Social Media

Common 1099-DIV and 1099-B Errors Explained and Solutions

What to Do If Your 1099-DIV or 1099-B Has Errors

Key Takeaways

Understanding 1099-DIV and 1099-B

Common Errors on 1099-DIV and 1099-B

Steps to Address Errors on Your 1099-DIV or 1099-B

1. Double-Check Your Records

2. Contact the Issuer

3. Wait for the Corrected Form

4. File a Form 8949 for Adjustments

5. Notify the IRS If Corrections Are Not Made

Avoiding Future Issues

Real-Life Example: Correcting a 1099-B Error

Consequences of Ignoring Errors

Navigating Tax Season with Confidence

Want a Faster Way to File Your Tax Extension?

Related Tax Article

Health Insurance Deductions Explained: Quick Guide

Savvy Tax Tips for Tax-Smart Retirement Savings

Roth vs Traditional IRA: Understanding Your Options

Last-Minute Tax Filing Tips for Procrastinators

Contribution Limits 2025: Maximize IRA & 401k Savings

New Business Tax Regulations in 2025: An Overview

How to Fix State Tax Mistakes? A Simple Guide

Wash Sale Rule Avoidance Essential Tips for Investors

Retirement Withdrawal Strategies Demystified

Tax Implications of Mergers and Acquisitions: Key Considerations

Tax Compliance Case Study: 10 Real-World Business Insights

Child Tax Credit Eligibility: Are You Qualified?

Top Self-Employed Tax Mistakes to Avoid

Are COBRA Premiums a Self-Employed Tax Deduction?

Trump Tax Plan 2025: Key Tips Business Tax Planning

10 Tax Planning Strategies to Reduce Self-Employment Tax

Business Tax Deadlines 2025: Paper vs E-Filing Options

Potential of Commercial Electric Vehicle (EV) Tax Credits

Tax-Advantaged Accounts for Financial Growth

How One Family Saved $3,000 Through Smart Tax Deductions

Enhance Payroll Tax Processes with Business Strategies

Top Job Relocation Benefits Every Employee Should Know

Self-Employment Tax Audit Survival Guide

Tax Planning for Business Growth and Expansion Strategies

Tax Deduction for Health Insurance Premiums: A Complete Guide

Special Tax Benefits for Military and Veterans

What Is Gross Receipts Tax? Guide for Business Owners

Maximizing Business Tax Credits and Incentives for Industry Growth

Avoid Paying Capital Gains Tax: Legal Strategies for Selling Stocks

Interest vs. Dividends Tax: What’s the Difference?

2025 Tax Filing Tips: Stay Ahead of Deadlines

Film Industry Tax Incentives: Boosting Local Economies

Maximizing Your 401(k) Contributions for Tax Benefits

Simplify Investment Income and Estimated Tax Payments in 2025

Navigating State Tax Nexus for Remote Work Success

Federal Unemployment Tax Act (FUTA) Explained Simply

Tax Due Diligence Strategies for Business Success

IRS Form 1095-A Tax Guide Simplified

Schedule C Tips for Freelancers and Small Business Owners

How to File for a Tax Extension

Discover Credits for Disabled and Caregivers to Enhance Tax Returns

Choosing Between LLC and S-Corp: Tax Benefits and Drawbacks

Paper vs. E-Filing Taxes: Which is Right for You in 2025?

Health Insurance Deductions: Understanding Employer Reimbursements

Basic Tax Filing Tips for Students & Part-Time Workers

Master Tips Reporting for Supplemental Income Taxation

Maximize Your Tax Benefits by Timing Income

HSA Tips: Cut Taxes and Reduce Healthcare Costs

Joint Venture Tax Treatment: Strategies for Compliance and Profit

Adapting Your Tax Strategy to Significant Life Changes

Child Tax Credit 2025: Key Changes and Updates

When Are Business Taxes Due in 2025? Filing Deadlines & Tips

Hospitality Tax Planning Strategies to Maximize Deductions

Top Irregular Income Tax Strategies for Financial Success

Tax Considerations for the Self-Employed

Tax Compliance Technology for Streamlined Efficiency

2025 Best Tax Software for Hassle-Free Returns

Tax Considerations When Acquiring Another Company

2025 TCJA Expiration: What to Expect

Schedule D Tips and Tricks for Tax Season

Key Tax Filing Deadlines in 2025 Every First-Time Filer Should Know

10 Expert Tips to Maximize Your Tax Refund This Year

Amended Tax Return: Top 5 Reasons to File Form 1040-X