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Military Income Tax Calculator

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Military Income Tax Calculator

Military income tax calculator 8. Military income tax calculator   Dividends and Other Distributions Table of Contents Reminder Introduction Useful Items - You may want to see: General InformationDividends not reported on Form 1099-DIV. Military income tax calculator Reporting tax withheld. Military income tax calculator Nominees. Military income tax calculator Ordinary DividendsQualified Dividends Dividends Used to Buy More Stock Money Market Funds Capital Gain DistributionsBasis adjustment. Military income tax calculator Nondividend DistributionsLiquidating Distributions Distributions of Stock and Stock Rights Other DistributionsInformation reporting requirement. Military income tax calculator Alternative minimum tax treatment. Military income tax calculator How To Report Dividend IncomeInvestment interest deducted. Military income tax calculator Reminder Foreign-source income. Military income tax calculator  If you are a U. Military income tax calculator S. Military income tax calculator citizen with dividend income from sources outside the United States (foreign-source income), you must report that income on your tax return unless it is exempt by U. Military income tax calculator S. Military income tax calculator law. Military income tax calculator This is true whether you reside inside or outside the United States and whether or not you receive a Form 1099 from the foreign payer. Military income tax calculator Introduction This chapter discusses the tax treatment of: Ordinary dividends, Capital gain distributions, Nondividend distributions, and Other distributions you may receive from a corporation or a mutual fund. Military income tax calculator This chapter also explains how to report dividend income on your tax return. Military income tax calculator Dividends are distributions of money, stock, or other property paid to you by a corporation or by a mutual fund. Military income tax calculator You also may receive dividends through a partnership, an estate, a trust, or an association that is taxed as a corporation. Military income tax calculator However, some amounts you receive that are called dividends are actually interest income. Military income tax calculator (See Dividends that are actually interest under Taxable Interest in chapter 7. Military income tax calculator ) Most distributions are paid in cash (or check). Military income tax calculator However, distributions can consist of more stock, stock rights, other property, or services. Military income tax calculator Useful Items - You may want to see: Publication 514 Foreign Tax Credit for Individuals 550 Investment Income and Expenses Form (and Instructions) Schedule B (Form 1040A or 1040) Interest and Ordinary Dividends General Information This section discusses general rules for dividend income. Military income tax calculator Tax on unearned income of certain children. Military income tax calculator   Part of a child's 2013 unearned income may be taxed at the parent's tax rate. Military income tax calculator If it is, Form 8615, Tax for Certain Children Who Have Unearned Income, must be completed and attached to the child's tax return. Military income tax calculator If not, Form 8615 is not required and the child's income is taxed at his or her own tax rate. Military income tax calculator    Some parents can choose to include the child's interest and dividends on the parent's return if certain requirements are met. Military income tax calculator Use Form 8814, Parents' Election To Report Child's Interest and Dividends, for this purpose. Military income tax calculator   For more information about the tax on unearned income of children and the parents' election, see chapter 31. Military income tax calculator Beneficiary of an estate or trust. Military income tax calculator    Dividends and other distributions you receive as a beneficiary of an estate or trust are generally taxable income. Military income tax calculator You should receive a Schedule K-1 (Form 1041), Beneficiary's Share of Income, Deductions, Credits, etc. Military income tax calculator , from the fiduciary. Military income tax calculator Your copy of Schedule K-1 (Form 1041) and its instructions will tell you where to report the income on your Form 1040. Military income tax calculator Social security number (SSN) or individual taxpayer identification number (ITIN). Military income tax calculator    You must give your SSN or ITIN to any person required by federal tax law to make a return, statement, or other document that relates to you. Military income tax calculator This includes payers of dividends. Military income tax calculator If you do not give your SSN or ITIN to the payer of dividends, you may have to pay a penalty. Military income tax calculator For more information on SSNs and ITINs, see Social Security Number (SSN) in chapter 1. Military income tax calculator Backup withholding. Military income tax calculator   Your dividend income is generally not subject to regular withholding. Military income tax calculator However, it may be subject to backup withholding to ensure that income tax is collected on the income. Military income tax calculator Under backup withholding, the payer of dividends must withhold, as income tax, on the amount you are paid, applying the appropriate withholding rate. Military income tax calculator   Backup withholding may also be required if the IRS has determined that you underreported your interest or dividend income. Military income tax calculator For more information, see Backup Withholding in chapter 4. Military income tax calculator Stock certificate in two or more names. Military income tax calculator   If two or more persons hold stock as joint tenants, tenants by the entirety, or tenants in common, each person's share of any dividends from the stock is determined by local law. Military income tax calculator Form 1099-DIV. Military income tax calculator   Most corporations and mutual funds use Form 1099-DIV, Dividends and Distributions, to show you the distributions you received from them during the year. Military income tax calculator Keep this form with your records. Military income tax calculator You do not have to attach it to your tax return. Military income tax calculator Dividends not reported on Form 1099-DIV. Military income tax calculator   Even if you do not receive Form 1099-DIV, you must still report all your taxable dividend income. Military income tax calculator For example, you may receive distributive shares of dividends from partnerships or S corporations. Military income tax calculator These dividends are reported to you on Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc. Military income tax calculator , and Schedule K-1 (Form 1120S), Shareholder's Share of Income, Deductions, Credits, etc. Military income tax calculator Reporting tax withheld. Military income tax calculator   If tax is withheld from your dividend income, the payer must give you a Form 1099-DIV that indicates the amount withheld. Military income tax calculator Nominees. Military income tax calculator   If someone receives distributions as a nominee for you, that person should give you a Form 1099-DIV, which will show distributions received on your behalf. Military income tax calculator Form 1099-MISC. Military income tax calculator   Certain substitute payments in lieu of dividends or tax-exempt interest received by a broker on your behalf must be reported to you on Form 1099-MISC, Miscellaneous Income, or a similar statement. Military income tax calculator See Reporting Substitute Payments under Short Sales in chapter 4 of Publication 550 for more information about reporting these payments. Military income tax calculator Incorrect amount shown on a Form 1099. Military income tax calculator   If you receive a Form 1099 that shows an incorrect amount (or other incorrect information), you should ask the issuer for a corrected form. Military income tax calculator The new Form 1099 you receive will be marked “Corrected. Military income tax calculator ” Dividends on stock sold. Military income tax calculator   If stock is sold, exchanged, or otherwise disposed of after a dividend is declared but before it is paid, the owner of record (usually the payee shown on the dividend check) must include the dividend in income. Military income tax calculator Dividends received in January. Military income tax calculator   If a mutual fund (or other regulated investment company) or real estate investment trust (REIT) declares a dividend (including any exempt-interest dividend or capital gain distribution) in October, November, or December, payable to shareholders of record on a date in one of those months but actually pays the dividend during January of the next calendar year, you are considered to have received the dividend on December 31. Military income tax calculator You report the dividend in the year it was declared. Military income tax calculator Ordinary Dividends Ordinary (taxable) dividends are the most common type of distribution from a corporation or a mutual fund. Military income tax calculator They are paid out of earnings and profits and are ordinary income to you. Military income tax calculator This means they are not capital gains. Military income tax calculator You can assume that any dividend you receive on common or preferred stock is an ordinary dividend unless the paying corporation or mutual fund tells you otherwise. Military income tax calculator Ordinary dividends will be shown in box 1a of the Form 1099-DIV you receive. Military income tax calculator Qualified Dividends Qualified dividends are the ordinary dividends subject to the same 0%, 15%, or 20% maximum tax rate that applies to net capital gain. Military income tax calculator They should be shown in box 1b of the Form 1099-DIV you receive. Military income tax calculator The maximum rate of tax on qualified dividends is: 0% on any amount that otherwise would be taxed at a 10% or 15% rate. Military income tax calculator 15% on any amount that otherwise would be taxed at rates greater than 15% but less than 39. Military income tax calculator 6%. Military income tax calculator 20% on any amount that otherwise would be taxed at a 39. Military income tax calculator 6% rate. Military income tax calculator To qualify for the maximum rate, all of the following requirements must be met. Military income tax calculator The dividends must have been paid by a U. Military income tax calculator S. Military income tax calculator corporation or a qualified foreign corporation. Military income tax calculator (See Qualified foreign corporation , later. Military income tax calculator ) The dividends are not of the type listed later under Dividends that are not qualified dividends . Military income tax calculator You meet the holding period (discussed next). Military income tax calculator Holding period. Military income tax calculator   You must have held the stock for more than 60 days during the 121-day period that begins 60 days before the ex-dividend date. Military income tax calculator The ex-dividend date is the first date following the declaration of a dividend on which the buyer of a stock is not entitled to receive the next dividend payment. Military income tax calculator Instead, the seller will get the dividend. Military income tax calculator   When counting the number of days you held the stock, include the day you disposed of the stock, but not the day you acquired it. Military income tax calculator See the examples later. Military income tax calculator Exception for preferred stock. Military income tax calculator   In the case of preferred stock, you must have held the stock more than 90 days during the 181-day period that begins 90 days before the ex-dividend date if the dividends are due to periods totaling more than 366 days. Military income tax calculator If the preferred dividends are due to periods totaling less than 367 days, the holding period in the previous paragraph applies. Military income tax calculator Example 1. Military income tax calculator You bought 5,000 shares of XYZ Corp. Military income tax calculator common stock on July 9, 2013. Military income tax calculator XYZ Corp. Military income tax calculator paid a cash dividend of 10 cents per share. Military income tax calculator The ex-dividend date was July 16, 2013. Military income tax calculator Your Form 1099-DIV from XYZ Corp. Military income tax calculator shows $500 in box 1a (ordinary dividends) and in box 1b (qualified dividends). Military income tax calculator However, you sold the 5,000 shares on August 12, 2013. Military income tax calculator You held your shares of XYZ Corp. Military income tax calculator for only 34 days of the 121-day period (from July 10, 2013, through August 12, 2013). Military income tax calculator The 121-day period began on May 17, 2013 (60 days before the ex-dividend date), and ended on September 14, 2013. Military income tax calculator You have no qualified dividends from XYZ Corp. Military income tax calculator because you held the XYZ stock for less than 61 days. Military income tax calculator Example 2. Military income tax calculator Assume the same facts as in Example 1 except that you bought the stock on July 15, 2013 (the day before the ex-dividend date), and you sold the stock on September 16, 2013. Military income tax calculator You held the stock for 63 days (from July 16, 2013, through September 16, 2013). Military income tax calculator The $500 of qualified dividends shown in box 1b of your Form 1099-DIV are all qualified dividends because you held the stock for 61 days of the 121-day period (from July 16, 2013, through September 14, 2013). Military income tax calculator Example 3. Military income tax calculator You bought 10,000 shares of ABC Mutual Fund common stock on July 9, 2013. Military income tax calculator ABC Mutual Fund paid a cash dividend of 10 cents a share. Military income tax calculator The ex-dividend date was July 16, 2013. Military income tax calculator The ABC Mutual Fund advises you that the portion of the dividend eligible to be treated as qualified dividends equals 2 cents per share. Military income tax calculator Your Form 1099-DIV from ABC Mutual Fund shows total ordinary dividends of $1,000 and qualified dividends of $200. Military income tax calculator However, you sold the 10,000 shares on August 12, 2013. Military income tax calculator You have no qualified dividends from ABC Mutual Fund because you held the ABC Mutual Fund stock for less than 61 days. Military income tax calculator Holding period reduced where risk of loss is diminished. Military income tax calculator   When determining whether you met the minimum holding period discussed earlier, you cannot count any day during which you meet any of the following conditions. Military income tax calculator You had an option to sell, were under a contractual obligation to sell, or had made (and not closed) a short sale of substantially identical stock or securities. Military income tax calculator You were grantor (writer) of an option to buy substantially identical stock or securities. Military income tax calculator Your risk of loss is diminished by holding one or more other positions in substantially similar or related property. Military income tax calculator   For information about how to apply condition (3), see Regulations section 1. Military income tax calculator 246-5. Military income tax calculator Qualified foreign corporation. Military income tax calculator   A foreign corporation is a qualified foreign corporation if it meets any of the following conditions. Military income tax calculator The corporation is incorporated in a U. Military income tax calculator S. Military income tax calculator possession. Military income tax calculator The corporation is eligible for the benefits of a comprehensive income tax treaty with the United States that the Treasury Department determines is satisfactory for this purpose and that includes an exchange of information program. Military income tax calculator For a list of those treaties, see Table 8-1. Military income tax calculator The corporation does not meet (1) or (2) above, but the stock for which the dividend is paid is readily tradable on an established securities market in the United States. Military income tax calculator See Readily tradable stock , later. Military income tax calculator Exception. Military income tax calculator   A corporation is not a qualified foreign corporation if it is a passive foreign investment company during its tax year in which the dividends are paid or during its previous tax year. Military income tax calculator Readily tradable stock. Military income tax calculator   Any stock (such as common, ordinary, or preferred) or an American depositary receipt in respect of that stock is considered to satisfy requirement (3) under Qualified foreign corporation , if it is listed on a national securities exchange that is registered under section 6 of the Securities Exchange Act of 1934 or on the Nasdaq Stock Market. Military income tax calculator For a list of the exchanges that meet these requirements, see www. Military income tax calculator sec. Military income tax calculator gov/divisions/marketreg/mrexchanges. Military income tax calculator shtml. Military income tax calculator Dividends that are not qualified dividends. Military income tax calculator   The following dividends are not qualified dividends. Military income tax calculator They are not qualified dividends even if they are shown in box 1b of Form 1099-DIV. Military income tax calculator Capital gain distributions. Military income tax calculator Dividends paid on deposits with mutual savings banks, cooperative banks, credit unions, U. Military income tax calculator S. Military income tax calculator building and loan associations, U. Military income tax calculator S. Military income tax calculator savings and loan associations, federal savings and loan associations, and similar financial institutions. Military income tax calculator (Report these amounts as interest income. Military income tax calculator ) Dividends from a corporation that is a tax-exempt organization or farmer's cooperative during the corporation's tax year in which the dividends were paid or during the corporation's previous tax year. Military income tax calculator Dividends paid by a corporation on employer securities held on the date of record by an employee stock ownership plan (ESOP) maintained by that corporation. Military income tax calculator Dividends on any share of stock to the extent you are obligated (whether under a short sale or otherwise) to make related payments for positions in substantially similar or related property. Military income tax calculator Payments in lieu of dividends, but only if you know or have reason to know the payments are not qualified dividends. Military income tax calculator Payments shown in Form 1099-DIV, box 1b, from a foreign corporation to the extent you know or have reason to know the payments are not qualified dividends. Military income tax calculator Table 8-1. Military income tax calculator Income Tax Treaties Income tax treaties the United States has with the following countries satisfy requirement (2) under Qualified foreign corporation. Military income tax calculator Australia Indonesia Romania Austria Ireland Russian Bangladesh Israel Federation Barbados Italy Slovak Belgium Jamaica Republic Bulgaria Japan Slovenia Canada Kazakhstan South Africa China Korea Spain Cyprus Latvia Sri Lanka Czech Lithuania Sweden Republic Luxembourg Switzerland Denmark Malta Thailand Egypt Mexico Trinidad and Estonia Morocco Tobago Finland Netherlands Tunisia France New Zealand Turkey Germany Norway Ukraine Greece Pakistan United Hungary Philippines Kingdom Iceland Poland Venezuela India Portugal     Dividends Used to Buy More Stock The corporation in which you own stock may have a dividend reinvestment plan. Military income tax calculator This plan lets you choose to use your dividends to buy (through an agent) more shares of stock in the corporation instead of receiving the dividends in cash. Military income tax calculator Most mutual funds also permit shareholders to automatically reinvest distributions in more shares in the fund, instead of receiving cash. Military income tax calculator If you use your dividends to buy more stock at a price equal to its fair market value, you still must report the dividends as income. Military income tax calculator If you are a member of a dividend reinvestment plan that lets you buy more stock at a price less than its fair market value, you must report as dividend income the fair market value of the additional stock on the dividend payment date. Military income tax calculator You also must report as dividend income any service charge subtracted from your cash dividends before the dividends are used to buy the additional stock. Military income tax calculator But you may be able to deduct the service charge. Military income tax calculator See chapter 28 for more information about deducting expenses of producing income. Military income tax calculator In some dividend reinvestment plans, you can invest more cash to buy shares of stock at a price less than fair market value. Military income tax calculator If you choose to do this, you must report as dividend income the difference between the cash you invest and the fair market value of the stock you buy. Military income tax calculator When figuring this amount, use the fair market value of the stock on the dividend payment date. Military income tax calculator Money Market Funds Report amounts you receive from money market funds as dividend income. Military income tax calculator Money market funds are a type of mutual fund and should not be confused with bank money market accounts that pay interest. Military income tax calculator Capital Gain Distributions Capital gain distributions (also called capital gain dividends) are paid to you or credited to your account by mutual funds (or other regulated investment companies) and real estate investment trusts (REITs). Military income tax calculator They will be shown in box 2a of the Form 1099-DIV you receive from the mutual fund or REIT. Military income tax calculator Report capital gain distributions as long-term capital gains, regardless of how long you owned your shares in the mutual fund or REIT. Military income tax calculator Undistributed capital gains of mutual funds and REITs. Military income tax calculator    Some mutual funds and REITs keep their long-term capital gains and pay tax on them. Military income tax calculator You must treat your share of these gains as distributions, even though you did not actually receive them. Military income tax calculator However, they are not included on Form 1099-DIV. Military income tax calculator Instead, they are reported to you in box 1a of Form 2439. Military income tax calculator   Report undistributed capital gains (box 1a of Form 2439) as long-term capital gains on Schedule D (Form 1040), column (h), line 11. Military income tax calculator   The tax paid on these gains by the mutual fund or REIT is shown in box 2 of Form 2439. Military income tax calculator You take credit for this tax by including it on Form 1040, line 71, and checking box a on that line. Military income tax calculator Attach Copy B of Form 2439 to your return, and keep Copy C for your records. Military income tax calculator Basis adjustment. Military income tax calculator   Increase your basis in your mutual fund, or your interest in a REIT, by the difference between the gain you report and the credit you claim for the tax paid. Military income tax calculator Additional information. Military income tax calculator   For more information on the treatment of distributions from mutual funds, see Publication 550. Military income tax calculator Nondividend Distributions A nondividend distribution is a distribution that is not paid out of the earnings and profits of a corporation or a mutual fund. Military income tax calculator You should receive a Form 1099-DIV or other statement showing the nondividend distribution. Military income tax calculator On Form 1099-DIV, a nondividend distribution will be shown in box 3. Military income tax calculator If you do not receive such a statement, you report the distribution as an ordinary dividend. Military income tax calculator Basis adjustment. Military income tax calculator   A nondividend distribution reduces the basis of your stock. Military income tax calculator It is not taxed until your basis in the stock is fully recovered. Military income tax calculator This nontaxable portion is also called a return of capital; it is a return of your investment in the stock of the company. Military income tax calculator If you buy stock in a corporation in different lots at different times, and you cannot definitely identify the shares subject to the nondividend distribution, reduce the basis of your earliest purchases first. Military income tax calculator   When the basis of your stock has been reduced to zero, report any additional nondividend distribution you receive as a capital gain. Military income tax calculator Whether you report it as a long-term or short-term capital gain depends on how long you have held the stock. Military income tax calculator See Holding Period in chapter 14. Military income tax calculator Example. Military income tax calculator You bought stock in 2000 for $100. Military income tax calculator In 2003, you received a nondividend distribution of $80. Military income tax calculator You did not include this amount in your income, but you reduced the basis of your stock to $20. Military income tax calculator You received a nondividend distribution of $30 in 2013. Military income tax calculator The first $20 of this amount reduced your basis to zero. Military income tax calculator You report the other $10 as a long-term capital gain for 2013. Military income tax calculator You must report as a long-term capital gain any nondividend distribution you receive on this stock in later years. Military income tax calculator Liquidating Distributions Liquidating distributions, sometimes called liquidating dividends, are distributions you receive during a partial or complete liquidation of a corporation. Military income tax calculator These distributions are, at least in part, one form of a return of capital. Military income tax calculator They may be paid in one or more installments. Military income tax calculator You will receive Form 1099-DIV from the corporation showing you the amount of the liquidating distribution in box 8 or 9. Military income tax calculator For more information on liquidating distributions, see chapter 1 of Publication 550. Military income tax calculator Distributions of Stock and Stock Rights Distributions by a corporation of its own stock are commonly known as stock dividends. Military income tax calculator Stock rights (also known as “stock options”) are distributions by a corporation of rights to acquire the corporation's stock. Military income tax calculator Generally, stock dividends and stock rights are not taxable to you, and you do not report them on your return. Military income tax calculator Taxable stock dividends and stock rights. Military income tax calculator   Distributions of stock dividends and stock rights are taxable to you if any of the following apply. Military income tax calculator You or any other shareholder have the choice to receive cash or other property instead of stock or stock rights. Military income tax calculator The distribution gives cash or other property to some shareholders and an increase in the percentage interest in the corporation's assets or earnings and profits to other shareholders. Military income tax calculator The distribution is in convertible preferred stock and has the same result as in (2). Military income tax calculator The distribution gives preferred stock to some common stock shareholders and common stock to other common stock shareholders. Military income tax calculator The distribution is on preferred stock. Military income tax calculator (The distribution, however, is not taxable if it is an increase in the conversion ratio of convertible preferred stock made solely to take into account a stock dividend, stock split, or similar event that would otherwise result in reducing the conversion right. Military income tax calculator )   The term “stock” includes rights to acquire stock, and the term “shareholder” includes a holder of rights or of convertible securities. Military income tax calculator If you receive taxable stock dividends or stock rights, include their fair market value at the time of distribution in your income. Military income tax calculator Preferred stock redeemable at a premium. Military income tax calculator   If you hold preferred stock having a redemption price higher than its issue price, the difference (the redemption premium) generally is taxable as a constructive distribution of additional stock on the preferred stock. Military income tax calculator For more information, see chapter 1 of Publication 550. Military income tax calculator Basis. Military income tax calculator   Your basis in stock or stock rights received in a taxable distribution is their fair market value when distributed. Military income tax calculator If you receive stock or stock rights that are not taxable to you, see Stocks and Bonds under Basis of Investment Property in chapter 4 of Publication 550 for information on how to figure their basis. Military income tax calculator Fractional shares. Military income tax calculator    You may not own enough stock in a corporation to receive a full share of stock if the corporation declares a stock dividend. Military income tax calculator However, with the approval of the shareholders, the corporation may set up a plan in which fractional shares are not issued but instead are sold, and the cash proceeds are given to the shareholders. Military income tax calculator Any cash you receive for fractional shares under such a plan is treated as an amount realized on the sale of the fractional shares. Military income tax calculator Report this transaction on Form 8949, Sales and Other Dispositions of Capital Assets. Military income tax calculator Enter your gain or loss, the difference between the cash you receive and the basis of the fractional shares sold, in column (h) of Schedule D (Form 1040) in Part I or Part II, whichever is appropriate. Military income tax calculator    Report these transactions on Form 8949 with the correct box checked. Military income tax calculator   For more information on Form 8949 and Schedule D (Form 1040), see chapter 4 of Publication 550. Military income tax calculator Also see the Instructions for Form 8949 and the Instructions for Schedule D (Form 1040). Military income tax calculator Example. Military income tax calculator You own one share of common stock that you bought on January 3, 2004, for $100. Military income tax calculator The corporation declared a common stock dividend of 5% on June 29, 2013. Military income tax calculator The fair market value of the stock at the time the stock dividend was declared was $200. Military income tax calculator You were paid $10 for the fractional-share stock dividend under a plan described in the discussion above. Military income tax calculator You figure your gain or loss as follows: Fair market value of old stock $200. Military income tax calculator 00 Fair market value of stock dividend (cash received) +10. Military income tax calculator 00 Fair market value of old stock and stock dividend $210. Military income tax calculator 00 Basis (cost) of old stock after the stock dividend (($200 ÷ $210) × $100) $95. Military income tax calculator 24 Basis (cost) of stock dividend (($10 ÷ $210) × $100) + 4. Military income tax calculator 76 Total $100. Military income tax calculator 00 Cash received $10. Military income tax calculator 00 Basis (cost) of stock dividend − 4. Military income tax calculator 76 Gain $5. Military income tax calculator 24 Because you had held the share of stock for more than 1 year at the time the stock dividend was declared, your gain on the stock dividend is a long-term capital gain. Military income tax calculator Scrip dividends. Military income tax calculator   A corporation that declares a stock dividend may issue you a scrip certificate that entitles you to a fractional share. Military income tax calculator The certificate is generally nontaxable when you receive it. Military income tax calculator If you choose to have the corporation sell the certificate for you and give you the proceeds, your gain or loss is the difference between the proceeds and the portion of your basis in the corporation's stock allocated to the certificate. Military income tax calculator   However, if you receive a scrip certificate that you can choose to redeem for cash instead of stock, the certificate is taxable when you receive it. Military income tax calculator You must include its fair market value in income on the date you receive it. Military income tax calculator Other Distributions You may receive any of the following distributions during the year. Military income tax calculator Exempt-interest dividends. Military income tax calculator   Exempt-interest dividends you receive from a mutual fund or other regulated investment company, including those received from a qualified fund of funds in any tax year beginning after December 22, 2010, are not included in your taxable income. Military income tax calculator Exempt-interest dividends should be shown in box 10 of Form 1099-DIV. Military income tax calculator Information reporting requirement. Military income tax calculator   Although exempt-interest dividends are not taxable, you must show them on your tax return if you have to file a return. Military income tax calculator This is an information reporting requirement and does not change the exempt-interest dividends to taxable income. Military income tax calculator Alternative minimum tax treatment. Military income tax calculator   Exempt-interest dividends paid from specified private activity bonds may be subject to the alternative minimum tax. Military income tax calculator See Alternative Minimum Tax (AMT) in chapter 30 for more information. Military income tax calculator Dividends on insurance policies. Military income tax calculator    Insurance policy dividends the insurer keeps and uses to pay your premiums are not taxable. Military income tax calculator However, you must report as taxable interest income the interest that is paid or credited on dividends left with the insurance company. Military income tax calculator    If dividends on an insurance contract (other than a modified endowment contract) are distributed to you, they are a partial return of the premiums you paid. Military income tax calculator Do not include them in your gross income until they are more than the total of all net premiums you paid for the contract. Military income tax calculator Report any taxable distributions on insurance policies on Form 1040, line 21. Military income tax calculator Dividends on veterans' insurance. Military income tax calculator   Dividends you receive on veterans' insurance policies are not taxable. Military income tax calculator In addition, interest on dividends left with the Department of Veterans Affairs is not taxable. Military income tax calculator Patronage dividends. Military income tax calculator   Generally, patronage dividends you receive in money from a cooperative organization are included in your income. Military income tax calculator   Do not include in your income patronage dividends you receive on: Property bought for your personal use, or Capital assets or depreciable property bought for use in your business. Military income tax calculator But you must reduce the basis (cost) of the items bought. Military income tax calculator If the dividend is more than the adjusted basis of the assets, you must report the excess as income. Military income tax calculator   These rules are the same whether the cooperative paying the dividend is a taxable or tax-exempt cooperative. Military income tax calculator Alaska Permanent Fund dividends. Military income tax calculator    Do not report these amounts as dividends. Military income tax calculator Instead, report these amounts on Form 1040, line 21; Form 1040A, line 13; or Form 1040EZ, line 3. Military income tax calculator How To Report Dividend Income Generally, you can use either Form 1040 or Form 1040A to report your dividend income. Military income tax calculator Report the total of your ordinary dividends on line 9a of Form 1040 or Form 1040A. Military income tax calculator Report qualified dividends on line 9b of Form 1040 or Form 1040A. Military income tax calculator If you receive capital gain distributions, you may be able to use Form 1040A or you may have to use Form 1040. Military income tax calculator See Exceptions to filing Form 8949 and Schedule D (Form 1040) in chapter 16. Military income tax calculator If you receive nondividend distributions required to be reported as capital gains, you must use Form 1040. Military income tax calculator You cannot use Form 1040EZ if you receive any dividend income. Military income tax calculator Form 1099-DIV. Military income tax calculator   If you owned stock on which you received $10 or more in dividends and other distributions, you should receive a Form 1099-DIV. Military income tax calculator Even if you do not receive Form 1099-DIV, you must report all your dividend income. Military income tax calculator   See Form 1099-DIV for more information on how to report dividend income. Military income tax calculator Form 1040A or 1040. Military income tax calculator    You must complete Schedule B (Form 1040A or 1040), Part II, and attach it to your Form 1040A or 1040, if: Your ordinary dividends (Form 1099-DIV, box 1a) are more than $1,500, or You received, as a nominee, dividends that actually belong to someone else. Military income tax calculator If your ordinary dividends are more than $1,500, you must also complete Schedule B (Form 1040A or 1040), Part III. Military income tax calculator   List on Schedule B (Form 1040A or 1040), Part II, line 5, each payer's name and the ordinary dividends you received. Military income tax calculator If your securities are held by a brokerage firm (in “street name”), list the name of the brokerage firm shown on Form 1099-DIV as the payer. Military income tax calculator If your stock is held by a nominee who is the owner of record, and the nominee credited or paid you dividends on the stock, show the name of the nominee and the dividends you received or for which you were credited. Military income tax calculator   Enter on line 6 the total of the amounts listed on line 5. Military income tax calculator Also enter this total on line 9a of Form 1040A or 1040. Military income tax calculator Qualified dividends. Military income tax calculator   Report qualified dividends (Form 1099-DIV, box 1b) on line 9b of Form 1040 or Form 1040A. Military income tax calculator The amount in box 1b is already included in box 1a. Military income tax calculator Do not add the amount in box 1b to, or substract it from, the amount in box 1a. Military income tax calculator   Do not include any of the following on line 9b. Military income tax calculator Qualified dividends you received as a nominee. Military income tax calculator See Nominees under How to Report Dividend Income in chapter 1 of Publication 550. Military income tax calculator Dividends on stock for which you did not meet the holding period. Military income tax calculator See Holding period , earlier under Qualified Dividends. Military income tax calculator Dividends on any share of stock to the extent you are obligated (whether under a short sale or otherwise) to make related payments for positions in substantially similar or related property. Military income tax calculator Payments in lieu of dividends, but only if you know or have reason to know the payments are not qualified dividends. Military income tax calculator Payments shown in Form 1099-DIV, box 1b, from a foreign corporation to the extent you know or have reason to know the payments are not qualified dividends. Military income tax calculator   If you have qualified dividends, you must figure your tax by completing the Qualified Dividends and Capital Gain Tax Worksheet in the Form 1040 or 1040A instructions or the Schedule D Tax Worksheet in the Schedule D (Form 1040) instructions, whichever applies. Military income tax calculator Enter qualified dividends on line 2 of the worksheet. Military income tax calculator Investment interest deducted. Military income tax calculator   If you claim a deduction for investment interest, you may have to reduce the amount of your qualified dividends that are eligible for the 0%, 15%, or 20% tax rate. Military income tax calculator Reduce it by the qualified dividends you choose to include in investment income when figuring the limit on your investment interest deduction. Military income tax calculator This is done on the Qualified Dividends and Capital Gain Tax Worksheet or the Schedule D Tax Worksheet. Military income tax calculator For more information about the limit on investment interest, see Investment expenses in chapter 23. Military income tax calculator Expenses related to dividend income. Military income tax calculator   You may be able to deduct expenses related to dividend income if you itemize your deductions on Schedule A (Form 1040). Military income tax calculator See chapter 28 for general information about deducting expenses of producing income. Military income tax calculator More information. Military income tax calculator    For more information about how to report dividend income, see chapter 1 of Publication 550 or the instructions for the form you must file. Military income tax calculator Prev  Up  Next   Home   More Online Publications
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Fraudulent email posing as the IRS 'Office of Professional Responsibility'

Nov. 10, 2011:
There is a phishing email risk you need to be aware of. It is a message claiming to be from the IRS Office of Professional Responsibility.

What to look for:

  • The subject line contains the text Acquire new EIN.
  • The body of the message instructs the recipient to obtain a new Employer Identification Number in connection with fraudulent actions on your behalf.
    • (Note that the text in the subject line and/or body of the message may read differently, but the message is similar.)

What to do if you receive such a message:

  1. Do not reply to the sender, access links contained in the email or submit any information 
  2. Forward the message as-is immediately to us at phishing@irs.gov
  3. Review How to report and identify phishing, email scams and bogus IRS websites
  4. If you receive a suspicious email or discover a website posing as the IRS, please forward the email or URL information to the IRS at phishing@irs.gov.

Remember
The IRS does not initiate contact with taxpayers by email to request personal or financial information. This includes any type of electronic communication, such as text messages and social media channels.

Page Last Reviewed or Updated: 24-Mar-2014

The Military Income Tax Calculator

Military income tax calculator Publication 3 - Additional Material Prev  Up  Next   Home   More Online Publications