An Overview of the Brokerage 1099 Tax Form
Do the letters OID mean anything to you? How about DIV, INT, or MISC? If you they do, great. If not, you're in the right place. These letters are among the designations assigned to 1099s that you might see as part of a 1099 Composite tax form—a tax form issued by your brokerage firm to help you report your taxable investment income when filing your tax return with the IRS.
Regular brokerage accounts are subject to tax reporting, especially if you received interest or dividend income or received proceeds from a sale or other disposition of a security. For each brokerage account you hold at Schwab, you'll receive a "1099 Composite and Year-End Summary," which combines different 1099 types into a single document, based on the activity in your account.
Important sections of the 1099 Composite form
The primary forms of income you'll need to include in your tax filing are contained in the following three sections of your 1099 Composite:
- 1099-DIV: This section shows any dividend income from securities like stocks and exchange-traded funds (ETFs) and capital gains from securities like mutual funds.
- 1099-INT: This reports interest income that could be generated from fixed income securities like municipal bonds, Treasuries, and certificates of deposit (CDs).
- 1099-B: This shows realized gains and losses made from selling securities or from other events, such as taxable corporate actions.
In addition to these three forms, your Schwab 1099 Composite may also include a 1099-MISC (Miscellaneous), which reports royalties or substitute payments, or a 1099-OID (Original Issue Discount), which reports fixed income that has OID reporting. The Year-End Summary at the end of the form shows additional information that may also be needed to help you complete your tax return, depending on the type of activity or investments in your brokerage account.
Keep in mind, any activity within a tax year that generates income may impact your tax filing, even if that information is not reported to you on a tax form, such as income from cryptocurrency transactions or rents you receive from a rental property.
Be sure to consult with a tax professional regarding your specific tax needs.
When can I expect to receive my 1099?
Schwab sends its 1099s in two waves. The first wave is typically sent out at the end of January, and the second wave goes out by mid-February. If you have more than one brokerage account, you'll receive a 1099 Composite for each account you hold.
You'll receive an email notification either when your 1099 Composite is available to view online or download from Schwab's 1099 Dashboard, or when we've mailed you a paper copy. (This will depend on the delivery preferences you've set on schwab.com.) After we've produced your 1099 Composite, you can access it any time, either on schwab.com or the Schwab Mobile app.
Reporting your investment income on your taxes can be a confusing process—but remember, knowledge is power. Once you understand the sections of your 1099 Composite and know how to determine if your investments are generating income (and how much), you might feel a little more at ease.
This material is intended for informational purposes only and should not be considered a personalized recommendation or investment advice. Investors should review investment strategies for their individual situations before making any investment decisions.
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