Understanding Tax Documents From Your Bank and Stock Broker

Written by , February 24, 2015

Understanding Tax Documents From Your Bank and Stock BrokerWe’re now right in the busiest part of tax season, as we begin to collect all of the materials we’ll need to be able to compute and file our tax returns. These will include not only our wage and other income statements from employers and those we’ve done business with over the course of the past year, but also various other types of forms.

You can expect to receive one or more tax documents from any banks or financial institutions that you have accounts with. Unfortunately, not every institution sends their forms out at the same time, so it’s important to know what you can expect, and be on the lookout for any applicable forms to arrive.

Here are some of the more common forms you’ll be receiving from your banking and brokerage companies:

  • Common Forms 1099. Form 1099 identifies various types of income you received over the course of the last year. If you have an interest-bearing account at your bank (whether it’s a savings account or checking account), then you’ll receive a 1099-INT detailing those amounts. If you have accounts at multiple banks or financial institutions, then you’ll receive a separate 1099-INT from each bank.
    • Many taxpayers will also receive one or more of the following: 1099-DIV (dividends and distributions you receive from your investments); 1099-MISC (miscellaneous income); and 1099-B (proceeds from broker and barter exchange transactions). And if you received a distribution from an IRA or other retirement plan, or made a rollover or IRA conversion, then you’ll also receive a Form 1099-R with the details of those transactions.
      Some less common types of Form 1099 include the 1099-LTC (long-term care and accelerated death benefits), 1099-C (Amount of canceled debt), and 1099-SA (distributions from an HSA or MSA).
  • Form 1098. If you currently have a mortgage on your home, and you paid at least $600 in mortgage interest last year, then you’ll also receive a Form 1098 from your bank. This form is particularly important because for many taxpayers their home mortgage interest deduction will be the largest (and therefore most valuable) deduction on their tax return.
    • Form 1098 also includes information about any points you paid last year in order to get the long information about escrow disbursements for real estate taxes (which will also be deductible on your return), as well as amounts you may have paid for insurance on your property.
  • Form 1098-E. If you’re paying back one or more student loans and paid at least $600 in interest, then you’ll receive a Form 1098-E. The Form 1098-E will also include other loan-related fees and charges you paid over the past year.
  • Form 5498. If you made one or more contributions to an IRA last year, then you’ll receive a Form 5498 which details those contributions.
  • Form 8889. If you have a Health Savings Account at your bank, then Form 8889 will detail your contributions to your account, and you’ll use this information to help you compute your eligibility for a tax deduction.
  • It’s important to know what tax forms you need from your bank and broker so that you have all the necessary information to file your tax return, and can receive your tax refund as soon as possible.

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