This states wages earned and taxes withheld and other deductions from your wages. More about forms here.
This states gross amount paid to you by your client. It may also include reimbursed expenses. Read more about reimbursed expenses here.
An investor with interest or dividend income receives a 1099-INT or 1099-DIV.
A partner in a partnership receives a K-1.
This states interest and dividends earned on your investments. Some may be non-taxable or have other qualifying characteristics.
An investor who sells a stock or other product receives a 1099-B.
This states the amount of sale proceeds, not the amount on which you must pay tax. if you sold your stock for less than it cost you, you will have a minus against your other income. [This is what you, the Baja California Sur artists, received. The 1099-B "says" you made an $80,000 sale. It says nothing about how much of that $80,000, if any, is taxable income.] This lists all the income and credits and changes to basis that occurred that year to that partner.
A trust beneficiary [one who receives money from the trust] receives a K-1.
This is similar to a partnership K-1.When you receive one of these forms and don't understand it, your first step should be to contact whoever prepared the form. Ask what it is for.
For you, the Baja California Sur artists, that would be the accountant who prepared the trust tax return. Trusts send out K-1s. Ask for an explanation of the 1099 you received. If you don't understand the answer, ask the accountant to explain again -- in layman's terms.
An exchange is just that, one thing is exchanged for another. In your case maybe one trust for another trust. For instance if a $50,000 trust is exchanged for a different $50,000 trust there is no gain nor loss. That's why you need to call whoever is handling the trust. If you get no help there call the IRS directly at 800.829-1040. Don't be afraid of contacting the IRS. The new IRS is friendly and often helpful. Don't use a tax preparation program for this situation.
Best,
June june@junewalkeronline.com
An exchange is just that, one thing is exchanged for another. In your case maybe one trust for another trust. For instance if a $50,000 trust is exchanged for a different $50,000 trust there is no gain nor loss. That's why you need to call whoever is handling the trust. If you get no help there call the IRS directly at 800.829-1040. Don't be afraid of contacting the IRS. The new IRS is friendly and often helpful. Don't use a tax preparation program for this situation.
You don't say what kind of artist you are but for my purpose I'll think of you as an accomplished watercolorist. Just as putting a paintbrush into the hand of your uncle doesn't make him a skilled painter, neither does putting you at the keyboard of TurboTax make you proficient in tax preparation. Over and over in my writing I alert indies to the problems of using tax prep software. More about that in a later Ways Through The Maze.
Best,
June june@junewalkeronline.com
