What Is a 1099 Consolidated Tax Statement?

A 1099 consolidated tax statement is a single document provided by financial institutions that summarizes various types of investment income and transactions for tax reporting purposes. This statement is commonly received by individuals who hold investments such as stocks, bonds, and mutual funds in brokerage accounts. It serves as a comprehensive record, streamlining the process of gathering necessary information for annual tax filings.

Understanding the Consolidated 1099

The consolidated 1099 is a unified statement issued by financial entities, such as brokerage firms, which combines information from several individual 1099 forms. This consolidation simplifies tax reporting for taxpayers managing diverse investment activities within a single institution. Its primary purpose is to provide a comprehensive overview of a taxpayer’s reportable income and transactions, rather than requiring them to track multiple separate forms. Financial institutions typically issue these statements by late February each year, although corrected statements may follow in March or April.

This single document aggregates data that would otherwise be spread across numerous individual tax forms. It is designed to enhance convenience for investors and the Internal Revenue Service (IRS) alike by presenting a clear, organized summary. While individual 1099 forms are still generated internally by the institution, the consolidated statement acts as a convenient compilation for the taxpayer. It provides a detailed record of financial activity that assists in accurate tax preparation.

Common Forms Included

A consolidated 1099 statement encompasses several individual 1099 forms, each reporting a specific type of income or transaction.

One common inclusion is Form 1099-B, “Proceeds from Broker and Barter Exchange Transactions,” which details the sale of securities such as stocks, bonds, and mutual funds. This form provides information like the sale proceeds, acquisition dates, and cost basis, which are used to calculate capital gains or losses.

Another frequently found form is Form 1099-DIV, “Dividends and Distributions,” reporting various types of dividends received from investments. This includes ordinary dividends and qualified dividends, as well as capital gain distributions from mutual funds or exchange-traded funds. Form 1099-INT, “Interest Income,” is also routinely part of the consolidated statement, detailing interest earned from sources like bank accounts, bonds, and certificates of deposit (CDs).

Furthermore, Form 1099-OID, “Original Issue Discount,” is included if an investor holds debt instruments issued at a discount, such as certain bonds or CDs. This form reports the imputed interest income that accrues over the life of the debt instrument, even if no cash payment is received.

Key Information and Tax Reporting

The consolidated 1099 statement provides information required for accurate tax reporting. It outlines gross proceeds from sales of securities, differentiating between covered and non-covered securities, with cost basis information provided where applicable. For covered securities, the cost basis is reported to the IRS by the financial institution. Ordinary and qualified dividends, along with various types of interest income, are clearly itemized, allowing taxpayers to properly categorize these amounts on their tax returns.

Taxpayers use the data from their consolidated 1099 to complete several IRS forms and schedules. Interest income and ordinary dividends are reported on Schedule B (Form 1040). Capital gains and losses from the sale of securities, detailed on the 1099-B portion of the statement, are initially reported on Form 8949, “Sales and Other Dispositions of Capital Assets.” The totals from Form 8949 then transfer to Schedule D (Form 1040), “Capital Gains and Losses,” where they are summarized to determine the overall capital gain or loss for the tax year. Taxpayers should review the information on their consolidated 1099 for accuracy and contact the issuing financial institution promptly if any discrepancies are identified.