Federal Tax Forms for Retirees: What To Expect

During the first quarter of each year, your mailbox begins to fill with various federal tax forms from the prior year. This deluge of forms typically does not stop during your retirement years.  In fact, the volume of these forms often increases because those at or near retirement may have more complex financial portfolios across a larger number of accounts.  

Federal tax forms are generated as the result of a wide range of financial transactions.  Real estate, investment, bank accounts, and even healthcare transactions can all create a maze of numbered tax forms.  In this article, we will list some of the more common forms that are received by taxpayers. We will also discuss the purpose of each tax form and when you can expect to receive it each year.

What is a 1099 Form?

1099s are part of a group of forms that report various types of income you receive throughout the year from a source other than your employer (for example, dividends, annuity distributions or interest income).  Depending on the type of income, the form will vary. 1099s are commonly known as “information returns” according to the IRS. Income from your employer typically does not generate Form 1099 as this income is reflected on your W-2.  Typically the person or entity that pays your income is responsible for sending the appropriate 1099 form to you.

 5 Types of 1099s Tax Forms Retirees Can Expect

1099-B

This form is most commonly generated by a financial institution for any taxpayer that has sold stocks, commodities, futures contracts, currency contracts, bonds,  options or other securities. The 1099-B form itemizes all transactions during the prior year. This includes the description of the investment, the purchase date, the price at the time of the sale and the resulting gain or loss from the transaction.  The 1099-B’s primary objective is to gather information on gains and losses into one form that can be then added to Schedule D to calculate taxes owed.  

1099-B must be generated each year by January 31st.

1099-DIV

Another common form is the 1099-DIV.  Like the 1099-B, a 1099-DIV is also typically created by the financial institution holding your investment portfolio.  Some securities, such as mutual funds or stocks, may pay dividends as a portion of a company’s earnings. When these distributions occur, the amount is reported to you through the 1099-DIV. 

This form is generated by January 31st of each year.

1099-INT

Another 1099 tax form that you are likely to receive is a 1099-INT.  A 1099-INT is a statement for any taxable interest paid to you during the year.  You will likely get this statement from your bank, brokerage company, or other financial institution.  Interest payments reported on this form usually come from savings, money market accounts, or Certificates of Deposit. 

Like other 1099s, this form must be generated by January 31st.

1099-MISC

A 1099-MISC form reports income earned from self-employment.  This is a different type of income if you’re currently employed with a salary. (You will not receive a 1099-MISC if you have a salary job where the income is reported on a W-2). 1099-MISC records payment from an entity or person, not your employer. Even if you’re retired, you can still receive a 1099-MISC form if you work as a consultant for your previous employer or from part-time self-employment.  In the case of working as a self-employed contractor or consultant, you will get a 1099-MISC from the entity that you are working for. 

This form should be created by January 31st each year.

1099-R

You will get this 1099-R form if you have had distributions from a retirement account.  Distributions from annuities, profit-sharing plans, IRAs, insurance contracts, Required Minimum Distributions (RMDs) and pensions are all included on the 1099-R.  This form will be created each year by the company that makes the distribution to you. 1099-R Form will include the gross distribution amount, the taxable amount of the distribution, and any taxes withheld from the distribution.

This form should be prepared by January 31st each year.

Other Common Retirement Tax Forms

1098 – Mortgage Interest Statement

A 1098 form reports the details of mortgage interest and other mortgage-related expenses that a sole proprietor or individual taxpayer incurred.  The form traditionally includes details of the total interest paid on a mortgage including interest that was prepaid at purchase. The form is issued by the lender and its contents are transferred to Schedule A on your tax return to receive the deduction.

Your lender will deliver your 1098 form by January 31st each year.

SSA-1099 – Social Security Benefits

An SSA-1099 form is used to report Social Security benefits issued to you during the year. This federal tax form is one of the few that you will receive that is not issued by a financial institution or your employer.  Instead, it is issued by the Social Security Administration. In some cases, you may have received benefits for more than one Social Security record, such as survivor’s benefits. In this scenario, you may get more than one form SSA-1099. You will need all of your SSA-1099 forms to determine if you need to pay tax on your benefits.  

Like other 1099 forms, SSA-1099s are mailed by January 31st each year.

5498 (regarding your RMDs)

The 5498 form is the result of any contributions made to an IRA. You will receive a copy of this form, but it does not need to be filed with your annual tax return. Instead, your IRA provider will provide a copy to the IRS on your behalf. In addition to reporting contributions made to IRA accounts, the 5498 updates the IRS on the status of Required Minimum Distributions. Copies of the form are typically sent out in May each year, unless it is the year where your Required Minimum Distributions are set to begin.

In that case, a copy of the form will be delivered by January 31st.  

Schedule K-1

The Schedule K-1 form reports the amount of income or loss passed through those that hold interests in a business.  The tax code allows certain types of entities to utilize what is known as pass-through taxation. This allows the income tax liability to be shifted from the business earning the income to those who have a beneficial interest in it. Schedule K-1s are most commonly associated with partnerships or beneficial income from a trust. While a K-1 can be different depending on the tax type of the entity, almost all will include details on the type of income, deduction or loss, so the taxpayer can report the information on their tax return.

The typical deadline for the creation of a K-1 is March 15th.  However, this can be delayed if the entity responsible for these forms experiences delays in filing their taxes.

Get Prepared for Tax Filing Season

Tax season always comes with a little anxiety for taxpayers.  No matter if you are organizing your documents to give to your CPA or preparing to complete return yourself, the documents listed above will likely be a part of that process.  Understanding some of the more common federal tax forms will hopefully help ease the pain of filing your taxes this year.

Last updated on January 24, 2020

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