Declaring your Investment Dividends Income

Dividends are taxable and must be reported to the IRS.

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Or, you can file an extension online with H&R Block.

Taxable dividends

By the end of January, Form 1099-DIV, reporting taxable dividends are sent from any company in which you own stock.

Two types of taxable dividends

On your 1099-DIV:

Box 1 shows ordinary dividends, taxable profits.

Box 2: capital gain distributions, fully taxable financial gains

Box 3. nontaxable distributions, returned investments - not taxed.

Avoid paying taxes on taxable dividends

By reinvesting instead of receiving distributions, the company pays your taxes on the distributions and you will own more capital!

Form 2439 lists taxes paid in your name which you can include as a taxes paid deduction.

Reporting dividend income

When filing Form 1040, attach Schedule B, if:

  • Box 1 of Form 1099-DIV is over $400, or
  • You received dividends from someone else.

When filing Form 1040a, attach Schedule 1 to your return.

Reporting dividend income help

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Related IRS publications

Get more information about dividend income through Publication 550 which also covers capital gains tax laws.

For paper filing, you need to attach Schedule A with your 1040, or Schedule 1 with your 1040a.

Note: you will need an Adobe Acrobat Reader to view these publications, which you can get here.