J.K. Lasser's Small Business Taxes 2013: Your Complete Guide to a Better Bottom Line

Dividends

WHO MUST REPORT

If your corporation pays out dividends or distributions to shareholders (including yourself), payments of $10 or more ($600 or more for liquidations) must be reported to the IRS and to the recipient.

File Form 1099-DIV, Dividends and Distributions. Request a copy from the IRS at (800) 829-FORM or purchase it from an office supply company (the form is a triplicate form that cannot be downloaded from the IRS website). The IRS copy of Form 1099-DIV must be accompanied by Form 1096, Annual Summary and Transmittal of U.S. Information Returns.

WHEN TO REPORT

Furnish the recipient with a copy of the form no later than January 31 of the year following the year in which dividends or distributions were paid.

File the form with the IRS no later than February 28 of the year following the year in which the dividends or distributions were paid. But if you file the form electronically, you have an additional month (to March 31) to file with the IRS.

WHERE TO REPORT

The filing location you use depends on where your corporation is located—there are 4 IRS service centers in which this information return is filed.

PENALTIES FOR NONFILING

The amount of the penalty for late filing depends on how late you are—the quicker you correct the nonfiling, the smaller your penalty will be. For example, the penalty is $15 per information return if you miss the due date but then file correctly within 30 days (up to a maximum penalty of $25,000 for small businesses). You are a small business ...