Informational Returns

Informational Returns

-a tax document that businesses are required to file in order to report certain business transactions to the IRS -any person, including corp, partnership, individual, estate, and trust, with reportable transactions during the calendar year must file information returns to report those transactions to the IRS -must also furnish statements to the recipients of the income -filers who have 250 or more returns must file electronically -the recipient of an informational return does not send copies to the IRS unless required. A taxpayer must attach Form w2 to the front of their Form 1040. Taxpayer should also attach form W2G and 1099R, but only if federal income tax was withheld

Backup withholding

-business taxpayer reporting payments made to a US person must withhold 24% from a payment that is subject to form 1099 reporting if one of the following conditions exists - person does not provide their TIN in the manner required (generally provided on Form w-9) - IRS provides notification that the TIN furnished by the payee is incorrect - there has been a notified payee underreporting - there has been a payee certification failure

1098-T, Tuition Statement

An eligible educational institution must provide each enrolled student with reportable transaction on this form in order to report certain amounts billed or payments received by the institution for qualified tuition and related expenses. -The institution also reports scholarships or grants using this form

W-2G, Certain Gambling Winnings

An organization conducting gaming activities must report certain gambling transactions to taxpayers and the IRS -reflects winnings and federal tax withholding -gambling organization must us form w-2G if any tax is withheld or the taxpayer has winnings equivalent to the following - bingo or slot machine - $12- or more (NOT reduced by the wager) - keno - $1500 (reduced by the wager) - poker - more than $5000 (reduced by the wager) - All others - $600 or more AND at least 300 times the amount of the wager

1099-INT, Interest Income

Financial Institutions that pay interest must report details regarding those payments in the following circumstances -interest payments are at least $10. Certain types of interest, such as interest on delayed death benefits paid by a life insurance co or interest on a state or federal tax refund have a higher threshold of $600 -if the institution withheld and paid any foreign tax on interest -if the institution whitehead (and did not refund) any federal income tax under the backup withholding rules regardless of the amount of the payment

Regular Gambling Withholding

-24% -applicable when gambling winnings exceed $5000 for sweepstakes, wagering pools or lotteries -Poker tournaments are wagering pools -for other wagering transactions (blackjack), regular gambling withholding does not apply unless winnings are at least $600 AND 300 times the amount wagered -IF withholding applies, a taxpayer who does not provide an SSN or TIN is subject to backup withholding

1099-DIV, Dividends and Distributions

A corporation must generally send to the IRS with Form 1096 by February 28 of the year following the year of a distribution. Generally, a corporation must furnish to shareholders by January 31 of the year following the close of the calendar year during which the corporation made the distributions. -It is necessary to file a Form 1099-DIV with the IRS for each person the corporation: - paid dividends (including capital gain dividends) and other distributions on stock of $10 or more - withheld and paid any foreign tax on dividends and other distributions on stock - withheld any federal income tax on dividends under the backup withholding rules OR - paid $600 or more as part of a liquidation

1098-E, Student Loan Interest Statement

A person (including a financial institution, a governmental unit, and an educational institution) that receives interest payments of $600 or more during the year on one or more qualified student loans must furnish this statement to each student

1098, Mortgage Interest Statement

A person (or organization) engaged in a trade or business that receives at least $600 of mortgage interest (including certain points) on any mortgage in the calendar year must report the mortgage interest on Form 1098 to the payor and the IRS -Report prepaid interest (other than points) only in the year in which it properly accrues -form i not filed if the interest is received from a corporation, partnership, trust,e state, association, or company other than a sole proprietor

1099-B, Proceeds from Broker and Barter Exchange Transactions

A securities broker must report and provide this form for each person for who the broker has sold (including short sales) stocks, bonds, commodities, regulated futures contracts, foreign currency contracts, forward contracts, debt instruments, etc., for cash. -Recent legislation no requires brokers to report cost basis in addition to proceeds from these transactions -Cost basis information makes the calculation of gains and losses easier for taxpayers

1099-MISC, Miscellaneous Return

Business taxpayer uses to report certain business payments; generally, payments to a corporation are excluded from this reporting requirement, however this exemption from reporting payments made to corporations does not apply to payments for legal services. Some most common items: - rents of $600 or more, other than rents paid to real estate agents - prizes and awards of $600 or more, (not for services) such as winnings on radio shows - royalty payments of $10 or more - gross proceeds paid to an attorney of $600 or more - fish purchased for resale of $600 or more - any fishing boat proceeds - nonqualified deferred compensation of $600 or more

1099-NEC, Nonemployee Compensation

Business taxpayer uses to report payments of $600 or more (and the amount is fixed and determinable) for services performed for one's business by people NOT treated as employees -payments to a corporation are excluded, unless payments are made to a corp for attorney fees - gross proceeds paid to attorneys of $600 or more 1099MISC, attorneys fees of more than $600 1099NEC -direct sales totaling $5000 or more, may either file 1099NEC or 1099MISC to report sales totaling $5000 or more of consumer products to a person on buy-sell, deposit-commission, or other commission basis for resale

1099-C, Cancellation of Debt

Certain entities must issue, to each borrower for canceled debts in excess of $600 on secured property. -Under certain circumstances, a borrower may recognize taxable income because of a debt that is canceled

1099-R, Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc

Communicates reportable distributions of $10 or more from retirement accounts, insurance contracts, and annuities -in addition to the amount distributed, a number or letter code in box 7 tells the taxpayer details about the type of distribution they received

1099-OID, Original Issue Discount

Difference between the purchase price of a debt instrument and its maturity value -each year a portion of the discount accrues as income to the recipient -financial institution must report OID if it amounts to $10 or more

1099-K, Payment Card and Third Party Network Transactions

PSE's (Payment settlement entities) are required to report the following transactions: -all payments made in settlement of payment card transactions (debit, credit, or stored value card) -payments in settlement of third-party network transactions IF (in 2022) - gross payments to a participating payee exceed $20,000 AND - there are more than 200 transactions with the participating payee

1099-G, Certain Government Payments

Reports certain payments that exceed $10, such as unemployment and state or local income tax refunds

Form 8300, Report of Cash Payments of $10000 in a Trade or Business

Taxpayer in trade or business receives more than $10000 in cash in single transaction or in related transactions, must file -form provides valuable information to the IRS and the FINCEN in their efforts to combat money laundering -due by the 15th day after the date the cash transaction occurred and may be filed electronically using FINCEN's BSA filing system -taxpayer must provide written statement to each party included on form 8300 by Jan 31 of the year following the reportable transaction - must include name, address, contact person and business telephone number, and aggregate amount of reportable cash - must also indicate that the information was provided to the IRS