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What to Know About Your Investment Tax Forms

MWE partner Amy Joyce talks to U.S. News & World Report about what investors need to know about investment tax forms this year, including how they have changed, why you may have received a corrected 1099 form, and what it means if you didn’t receive one.



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How Have Tax Forms Changed?

Investment tax forms haven’t changed much from last year, with one notable exception. Under the new tax law, there will be a new line item on 1099s referring to 199A dividends.

199A dividends are those from real estate investment trusts. Investors are now allowed to add 199A dividends to their 199A qualified business income. If you meet certain qualifications and don’t go over certain thresholds, an individual taxpayer can receive a deduction of up to 20 percent of 199A qualified business income, Joyce says.

The other big tax law change for investors is that investment expenses are no longer deductible. That’s a disappointment for a lot of investors and some states.

“A lot of the high income states like New York, New Jersey and Connecticut were not too pleased with the changes in the tax law,” Joyce says. Some have even decoupled from the changes and give the investment expense deduction back to investors at the state level.

You can tell if your state has decoupled by looking at the top of your tax forms. “Every year when new tax forms come out, there’s almost always a little section at the beginning of the instructions that says what’s new this year,” Joyce says. If your state has decided to add a deduction for investment expenses, it’ll mention the change in this section of the form.  Read More>>

Watch: Will Big Tax Changes Mean Smaller Refunds?