Q: As always, I mailed my 2003 tax return as soon as possible. But soon after I mailed it, my broker sent me a corrected Form 1099 that restated dividend income. Do I have to file an amended return, even though it was the brokerage firm's error? K.R., Crawfordsville, Ind.
A: Yes, but you won't be alone. Due to last year's tax law changes to dividends, the IRS expects a higher-than-normal error rate with 1099s, causing more people to file amended returns. The new law cut the maximum tax rate for dividends to 15 percent for taxpayers (the same as the maximum tax rate on long-term capital gain) retroactive to the beginning of 2003. But not all dividends qualify for this tax break—a fact that causes much confusion. For instance, most dividends from real estate investment trusts (REITs) are still taxed at ordinary income rates. Another reason for confusion: The lower tax rate on capital gains applies only to sales made after May 5, 2003. For more advice on the tax treatment of dividends and capital gains, access IRS Publication 550, Investment Income and Expenses, at www.irs.gov/publications/p550.
Like what you've read? ...Republish it and share great business tips!
Attention: Readers, Publishers, Editors, Bloggers, Media, Webmasters and more...
We believe great content should be read and passed around. After all, knowledge IS power. And good business can become great with the right information at their fingertips. If you'd like to share any of the insightful articles on BusinessManagementDaily.com, you may republish or syndicate it without charge.
The only thing we ask is that you keep the article exactly as it was written and formatted. You also need to include an attribution statement and link to the article.
" This information is proudly provided by Business Management Daily.com: http://www.businessmanagementdaily.com/5717/amend-return-if-broker-makes-1099-error "
- Beware issuing completely negative performance reviews
- 'No comment' is best response when reporters call about a firing
- Retain right to nix discipline that might be retaliation
- Gas pains: Implemented properly, telecommuting can be win-Win
- Act fast to punish violent employee, even if he's been the victim of harassment