1099 Tax Software Blog

Form 1099-B is an information return that the Internal Revenue Service requires to be filed for the gross proceeds of the sales of option shares in non-retirement accounts minus or including a contingent deferred sales charge (CDSC) and redemption fees.  Most commonly, mutual fund withdrawals and stock sales are reported with Form 1099-B.  However, several other stock related transactions should be reported on Form 1099-B.  Form 1099-B is not used however to report capital gains or losses.  The 1099-B information return is used to complete Schedule D on Form 1040 which requires the reporting of option shares.

Generally an employee’s broker will complete the 1099-B after the sale of option shares and send it to the payment recipient.  The broker may choose to report the transaction amount including transaction fees or excluding transaction fees.  If the broker chooses to report the proceeds including transaction costs, the person receiving the 1099-B form should add the fees to their cost basis on their Schedule D.

IRS Form 1099-B consists of 3-pages with 2 forms per page.  Copy A is a red-ink form that the broker can paper file with the IRS.  Do not download Copy A from the Interal Revenue Service website and print and submit.  Even if your printer can print in a red-colored ink, it’s not the same ink that the IRS uses to create Copy A.  The official printed version of the IRS form is scannable, but the online vrsion of it, printed from a website, is not. A penalty may be imposed for filing forms that can’t be scanned. Copy B can be printed on plain paper with black ink and is sent to the recipient.  Copy C is retained by the broker.

For brokers, each recipient of option shares must receive a 1099-B.  The form must be sent by the broker to the payment recipient by January 31 of the year after the calendar year in which the transactions being reported occurred.

Form 1099-B must be paper filed to the IRS by the end of February along with Form 1096, Annual Summary and Transmittal of U.S. Information Returns.  If you file electronically, you have until the end of March.  You can go online and file for an extension taking the due date to the end of April if you need more time.

If the recipient of the proceeds is a nonresident alien, you may have to withhold federal income tax.

Form W-2G is used to report gambling winnings.  W-2G is different from Forms 1098 and 1099 in that the 1099 forms must be paper filed on red-ink forms while Copy A of Form W-2G can be printed on plain paper with black ink and mailed along with Form 1096 to the IRS.

If your gambling winnings are high enough, the payer must provide a IRS Form W-2G to you and to the IRS, reporting the amount of your gambling winnings.

The types of gambling fall under the following three headings:

• Horse Racing, Dog Racing, Jai Alai, and Other Wagering Transactions Not Discussed
• Sweepstakes, Wagering Pools, and Lotteries
• Bingo, Keno, and Slot Machines

Form W-2G is used to report income and withholding related to gambling.　 Generally, you will receive a Form W-2G if you receive:

• $600 or more in gambling winnings and the payout is at least 300 times the amount of the wager (except　winnings from bingo, keno, and slot machines);
• $1,200 or more in gambling winnings from bingo or slot machines;
• $1,500 or more in proceeds (the amount of winnings less the amount of the wager) from keno; or

Any gambling winnings subject to federal income tax withholding.

Who must file Form W-2G

The payer, namely, the organization sponsoring the gaming event, must file Form W-2G when an individual wins a prize over a specific value amount.  The form is used to report gambling winnings OR to report gambling winnings and any federal income tax withheld on the winnings.

Form W-2G due dates

Copy B and C is due to the winner by the end of January. Copy A is due to the IRS by the end of February.　 If you are filing electronically, you have until March 31 (an additional month) to file and you can seek also seek an extension of time to file.

How do I complete Form W-2G?

Check the “Corrected” box at the top of the W-2G form if applicable.

Enter the payer’s name, address, federal identification number and telephone number.

Enter the winner’s name and address.

Box 1. Enter the gross winnings.

Box 2. Enter the Federal income tax withheld.  Federal income tax must be withheld at the rate of 25% on certain winnings less the wager.

Box 3. Select the type of wagers, which include: Horse track race, Dog track race, Jai-alai, State-conducted lottery, Keno, Bingo, Slot Machines and Other.

Box 4. Enter the date won!

Signature and Date. Sign and date Form W-2G if your are the only person entitled to the winnings.

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1099Fire focuses solely on the information reporting industry.  We develop and maintain software for year-end information compliance of 1042-S, 1096, 1098, 1099, 3921, 3922, 5498, W-2G and W-2/W-3 IRS forms. 1099Fire develops and markets a comprehensive range of products that enables any size of business or institution to effectively manage and comply with year-end filing requirements.

Its easy!!!

There are lots of companies on the web that sell the forms for a pretty penny. Anywhere from $23 for 100 forms and up.

You can attain the forms absolutely for free. No cost. Not even for shipping and handling by ordering the forms from the IRS.

By Phone

You can order as many forms as you like by calling 1-800-TAX-FORM (800-829-3676), an IRS provided toll-free number. There is no charge for calling, shipping or handling and they will ship up to 100 forms per call.

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You can also order the forms online by following this link:

http://www.1099fire.com/order_forms_free.htm

It takes anywhere from 3 days to 2-weeks to receive the forms.

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