What Is a 1099 Consolidated Tax Statement?

Tax statements provide details about various types of earnings, helping individuals accurately prepare their tax returns. The Form 1099 Consolidated Tax Statement is a streamlined document, particularly for those with investment activities. It combines information from several individual income reporting forms into a single, comprehensive record, simplifying the tax reporting process by consolidating diverse income streams from one financial institution.

Understanding the 1099 Consolidated Tax Statement

A 1099 Consolidated Tax Statement is a specialized tax document issued by financial institutions, such as brokerage firms and banks. This statement reports various types of non-employment income to both the IRS and the taxpayer. It gathers information from multiple individual IRS 1099 forms into one statement, reducing the number of separate documents a taxpayer might receive.

Financial institutions issue these consolidated statements for convenience, especially for clients with diverse investment portfolios, providing a single, multi-page document instead of numerous individual forms. This statement is typically received by individuals who hold investment accounts, or who earn interest, dividends, or other non-wage income from a single financial entity. A consolidated statement is not a single IRS form itself, but rather a summary document containing data from several official IRS 1099 forms, such as 1099-INT, 1099-DIV, 1099-B, 1099-OID, and sometimes 1099-MISC.

Key Information Included

A 1099 Consolidated Tax Statement provides a breakdown of various income types and transactions, organized into sections corresponding to specific IRS forms. This helps taxpayers identify and report different categories of earnings.

Form 1099-INT reports interest income, including interest earned from savings accounts, bonds, and certificates of deposit (CDs). Financial institutions issue a 1099-INT if at least $10 in interest was earned during the tax year.

Form 1099-DIV reports dividend income from stocks, mutual funds, and capital gains distributions. If you received at least $10 in dividends or other distributions, a 1099-DIV is issued. This form distinguishes between ordinary dividends and qualified dividends, which may be taxed at lower capital gains rates.

The statement also includes data from Form 1099-B, which reports proceeds from broker and barter exchange transactions. This form tracks the sale of securities such as stocks, bonds, and mutual funds, detailing the description of the item sold, acquisition and sale dates, acquisition cost (cost basis), and sale proceeds. For “covered securities,” the cost basis information is reported to the IRS by the broker.

Form 1099-OID reports Original Issue Discount (OID). OID occurs when a bond or debt instrument is issued at a price lower than its stated redemption price at maturity. This discount is considered a form of interest and is taxable as it accrues over the life of the obligation, even if the cash is not received until maturity.

Form 1099-MISC may appear for certain miscellaneous income types, such as royalty payments or substitute payments in lieu of dividends received through an investment account. Other information sometimes included on a consolidated statement can be state and local tax withheld, or foreign tax paid.

Using the Statement for Tax Filing

The 1099 Consolidated Tax Statement is an important resource for preparing your federal income tax return (Form 1040). Taxpayers use this document to transfer reported income amounts to the correct lines or schedules on their return. While the statement consolidates information, you enter the data from each underlying 1099 form separately into your tax preparation software or onto the specific IRS schedules.

For instance, interest income reported on Form 1099-INT and ordinary dividends from Form 1099-DIV are reported on Schedule B (Form 1040) if the total taxable interest or ordinary dividends exceed $1,500. If the amounts are below this threshold, they can be reported directly on Form 1040. Proceeds from the sale of securities reported on Form 1099-B are used to calculate capital gains or losses, which are then reported on Form 8949, Sales and Other Dispositions of Capital Assets, and summarized on Schedule D (Form 1040), Capital Gains and Losses.

Taxpayers should review their 1099 Consolidated Tax Statement for accuracy and compare it with their own records. Discrepancies can occur. If a statement is missing or contains errors, contact the issuing financial institution to request a copy or a correction.

The accuracy of cost basis information, particularly for transactions reported on Form 1099-B, is important for calculating capital gains or losses. Cost basis represents the original purchase price of an asset, adjusted for certain factors, and is subtracted from the sale proceeds to determine the gain or loss. Brokers report cost basis for “covered securities,” but for “non-covered” securities, the taxpayer is responsible for tracking and reporting this information. Proper reporting of all information from the consolidated statement helps ensure compliance with tax obligations and facilitates accurate calculation of your tax liability.