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It’s 1099 Time

It’s 1099 Time

A primer on 1099 forms.

 

Provided by MidAmerica Financial Resources

  

There are 17 types of 1099 forms, and you may have received one or more of them in the mail. Here’s a brief rundown of what they report.1

 

1099-A. This form is a consequence of foreclosure or bank repossession of secured real property – “acquisition or abandonment,” in IRS terms. Lenders send it to the foreclosed party and the buyer. It shows the date the lender acquired the property or learned it had been abandoned, the balance of principal outstanding, the fair market value, and a description of the property. The lender states on the form whether you are still liable to repay the debt. If the lender elects to sue you for a deficiency, you will not owe any taxes on this “unforgiven” debt. If the lender forgives the debt, the difference between the fair market value of the property and the amount you owe represents “income” to you, taxable unless you have filed bankruptcy or were technically insolvent at the time of the sale.1,2

 

1099-B. Brokers and barter exchanges have to report proceeds from securities, futures, commodities or barter exchange transactions with a 1099-B.1,3

 

1099-C. The 1099-C reports debt cancellation of $600 or more. You must claim the indicated amount on the 1099-C form as income in the year the debt was forgiven. When you pay income taxes on that amount, the creditor cannot come after the debt again. This form sometimes follows a foreclosure.1,2

 

1099-CAP. This one is for those who own shares in a corporation that has been acquired or has undergone a significant change in capital structure. If it was sold or changes have been made where you’ve earned cash or stock, for example, this form would be necessary.1

 

1099-DIV. When you receive dividends, capital gain distributions or liquidation distributions of $10 or more, you get one of these. For example, when a mutual fund sells off funds and realizes a capital gain, the fund informs you of your share of the capital gain through a 1099-DIV.1,4

 

1099-G. This form reports payments from government agencies and qualified state tuition programs – everything from state and local tax refunds and unemployment benefits to agriculture payments, gambling winnings, and taxable grants. It is usually issued to show unemployment benefits or a state tax refund.1

 

1099-H. Did you receive advance payments for the health care tax credit? If so, this form must be filed.1

 

1099-INT. Who hasn’t gotten one of these? This form reports interest income of $10 or more, and sometimes other tax items related to interest income (such as federal tax withholding or early withdrawal penalties).1

 

1099-K. This form is most frequently associated with ecommerce and other Internet transactions. In a year where you make equal to or in excess of $20,000 through 200 or more transactions, the payment processor (PayPal, Amazon payments, Stubhub, among others) will send you this form.1,5

 

1099-LTC. As the LTC part hints, these forms report distributions (payments) from long term care insurance contracts and accelerated death benefits paid out as a result of a life insurance contract or a viatical settlement.1

 

1099-MISC. You will get one of these if you receive $600 in “miscellaneous income” or more than $10 in royalties or “substitute” dividend payments in lieu of dividends or tax-exempt interest. What falls under “miscellaneous income?” Well, the category includes everything from compensation, commissions, bonuses and awards for non-employees (i.e., independent contractors) to punitive damages to office rents to landlords to fish purchases for cash and Indian gaming proceeds paid to tribal members.1,6

 

1099-SA. This form simply reports distributions from Health Savings Accounts (HSA), Archer Medical Savings Accounts (Archer MSA), or Meidcare Advantage Medical Savings Accounts (MA MSA).1

 

1099-OID. The 1099-OID reports original issue discounts of $10 or more. That is, the difference between the stated redemption price of a bond at maturity and the issue price of that bond. An OID is considered interest by the IRS, hence the form.1

 

1099-Q. Have you been paying for school expenses from a 529 plan, or a similar savings plan? Withdrawals will be reported on this form.1

 

1099-PATR. This obscure form reports patronage dividends – defined by the IRS as “distributions from cooperatives to their patrons.” If you have invested, in, say a farm cooperative or a clean energy plant, you are in 1099-PATR territory.1

 

1099-R. The 1099-R reports distributions from all types of retirement, pension and profit-sharing plans, and any IRA or annuity contract. This includes distributions resulting from Section 1035 exchanges (the tax-free exchange of one annuity contract for another), charitable gift annuities and Education IRAs, and PS 58 costs of split dollar life insurance plans. It also reports IRA recharacterizations (when an IRA contribution is reassigned to another IRA), and excess deferrals, excess contributions and distributions.1

 

1099-S. The 1099-S reports gross proceeds from real estate transactions or exchanges. By federal law, a closing attorney or real estate agent must provide a 1099-S to the person(s) receiving proceeds from the transaction. The recipient of the form does not need to fill it out.1

 

Questions? If you think you should have gotten one of these forms but didn’t get one … or if you think one of these forms might or might not apply to your situation … be sure to talk with a qualified tax professional or qualified financial professional today. He or she can help you identify, request and understand the 1099 forms in question.

    

MidAmerica Financial Resources may be reached at 618.548.4777 or greg.malan@natplan.com.

www.mid-america.us

 

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

     

Citations.

1 - irs.gov/uac/Forms-Related-To-Form-1099 [2/26/15]

2 - irs.gov/instructions/i1099ac/ar02.html#d0e86 [3/2/15]

3 - irs.gov/pub/irs-pdf/f1099b.pdf [3/2/15]

4 - irs.gov/instructions/i1099div/ar02.html [3/2/15]

5 - outright.com/blog/form-1099-k-a-refresher-course/ [1/22/13]

6 - irs.gov/uac/Form-1099-MISC,-Miscellaneous-Income [12/31/14]

 

 


Weekly Economic Update

MidAmerica Financial Resources Presents:

 

WEEKLY ECONOMIC UPDATE

 

 

 

WEEKLYQUOTE

“Look at all the sentences which seem true and question them.”

- David Reisman

 

 

WEEKLYTIP

Own a business? Negotiating with vendors may help you save a few hundred dollars in monthly operating costs. It doesn’t hurt to try it; any vendor would prefer a satisfied customer over a search for a new one.

 

 

WEEKLYRIDDLE

A man bet his neighbor that his dog could jump higher than his neighbor’s hedge. The neighbor accepted the bet and lost. Why?

 

Lastweek’sriddle:

Its body of stone shields a fiery heart. Under sufficient pressure, its head will depart. What is it?

 

Lastweek’sanswer:

A volcano.

 

 

 

 

March 30, 2015

HOME SALES PICK UP

Existing home sales accelerated 1.2% to an annual pace of 4.88 million in February, the National Association of Realtors announced. Sales had slowed markedly in January. February also brought a big jump in new home buying – a 7.8% increase according to the Census Bureau, taking the year-over-year gain to 24.8%.1,2

FEBRUARY BRINGS AN ADVANCE IN THE CPI

The 0.2% gain represented the first monthly rise in consumer prices since October; a 2.4% increase in gasoline prices made a demonstrable difference. Even so, this left the headline CPI flat year-over-year. The core CPI rose 0.2% in February, taking its annualized gain to 1.7%.3

UMICH INDEX STAGES MARCH RETREAT

At a mark of 93.0, March’s final University of Michigan consumer sentiment index declined 2.4 points from its final February reading. It has still improved vastly in the past year – last March, it was at 80.0.4

FINAL Q4 GDP: 2.2%

The third estimate of fourth-quarter growth by the Bureau of Economic Analysis was unchanged from the second; economists polled by Briefing.com expected an upward revision to 2.4%. Last week also brought news of a 1.4% slip in hard goods orders; even minus transportation orders, durables still declined 0.4%.2

WALL STREET WORRIES ABOUT A STRONG DOLLAR

Pessimism about the oncoming earnings season contributed to market choppiness and weekly losses for the big three. Across March 23-27, the Dow fell 2.29%, the Nasdaq 2.69% and the S&P 500 2.23%. Friday, the Dow settled at 17,712.66, the Nasdaq at 4,891.22 and the S&P at 2,061.02.5

THIS WEEK: Monday, the Commerce Department releases February personal spending numbers and the NAR issues February pending home sales data. The January S&P/Case-Shiller home price index and the Conference Board’s March consumer confidence survey arrive Tuesday. On Wednesday, ISM’s March factory PMI and ADP’s March employment report appear and Monsanto announces earnings. Thursday brings the March Challenger job-cut report, new initial claims totals, February factory orders data and earnings from CarMax and Perry Ellis. On Friday, the Labor Department presents its March jobs report and Federal Reserve chair Janet Yellen speaks briefly at a Fed research conference.

 

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

-0.62

+8.91

+12.65

+6.89

NASDAQ

+3.28

+17.83

+20.84

+14.55

S&P 500

+0.10

+11.46

+15.33

+7.55

REAL YIELD

3/27 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.19%

0.56%

1.62%

1.94%


Sources: online.wsj.com, bigcharts.com, treasury.gov - 3/27/155,6,7,8

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. 10-year TIPS real yield = projected return at maturity given expected inflation.

 

 

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Securities and advisory services offered through National Planning Corporation (NPC), Member FINRA/SIPC, a Registered Investment Adviser.
MidAmerica Financial Resources and Malan Financial Group are separate and unrelated companies to NPC.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world's largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. Past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

Citations.

1 - housingwire.com/articles/33325-new-home-sales-rebound-25-in-february [3/24/15]

2 - briefing.com/investor/calendars/economic/2015/03/23-27 [3/27/15]

3- nytimes.com/2015/03/25/business/rising-gas-costs-help-lift-us-consumer-prices.html [3/25/15]

4 - tinyurl.com/o9am74a [3/27/15]

5 - tinyurl.com/onrf6g7 [3/27/15]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F27%2F14&x=0&y=0 [3/27/15]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F27%2F14&x=0&y=0 [3/27/15]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F27%2F14&x=0&y=0 [3/27/15]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F26%2F10&x=0&y=0 [3/27/15]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F26%2F10&x=0&y=0 [3/27/15]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F26%2F10&x=0&y=0 [3/27/15]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F28%2F05&x=0&y=0 [3/27/15]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F28%2F05&x=0&y=0 [3/27/15]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F28%2F05&x=0&y=0 [3/27/15]

7 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [3/27/15]

8 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [3/27/15]

 

 





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