Corrected 1099-DIV: Do I have to amend my return?

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Smilodon
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Corrected 1099-DIV: Do I have to amend my return?

Post by Smilodon »

I received a corrected consolidated 2014 1099-DIV from my brokerage account today. The only change was to box 1b (Qualified Dividends). The value on the corrected 1099-DIV is slightly higher (by roughly $100) than on the original 1099-DIV. Other than that, the other boxes are identical - in particular box 1a (Total Ordinary Dividends) is the same value on both. So in summary, the correction is in my favor due to the lower tax rate on qualified dividends.

I would rather not go to the trouble to amend my 2014 federal return (already filed) since the tax savings would not be worth it to me. Or would the IRS object to my filed return not exactly matching the corrected 1099-DIV?

Thanks...
donall
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Re: Corrected 1099-DIV: Do I have to amend my return?

Post by donall »

I would. Amending a return is easy if you already have it set up on tax software.
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LadyGeek
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Re: Corrected 1099-DIV: Do I have to amend my return?

Post by LadyGeek »

This thread is now in the Personal Finance (Not Investing) forum (taxes).

Yes, amend your return. I've gone through the process with my tax software. You shouldn't have any problems.
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Tamales
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Re: Corrected 1099-DIV: Do I have to amend my return?

Post by Tamales »

FYI, I asked the same question a short time ago:
http://www.bogleheads.org/forum/viewtop ... 2&t=159878

The numbers aren't quite the same but I think the general points in the responses hold. If it's in your favor, you don't HAVE to amend.
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House Blend
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Re: Corrected 1099-DIV: Do I have to amend my return?

Post by House Blend »

In this case, not amending is unlikely to trigger any correspondence or corrections from the IRS.

There are circumstances where the correct amount of qualified dividends one is eligible to claim will be less than the numbers reported on one's Forms 1099-DIV. These circumstances generally do not require any extra documentation to be filed by the taxpayer (or by the fund custodian AFAIK).

As an aside, I think the frequent admonitions here in this forum that amending returns is easy-peasy are misplaced. No it isn't. It's easy if you've done it before. But the first time you change the oil in your car, or ride a bicycle, or amend a tax return, it is not easy. And when the payoff is $10 and might be something you don't particularly enjoy, people are going to come to different conclusions about what is a good use of their time.

(If the correction triggered extra taxes instead of less, I would be joining the you-should-amend chorus.)
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Re: Corrected 1099-DIV: Do I have to amend my return?

Post by LadyGeek »

House Blend wrote:As an aside, I think the frequent admonitions here in this forum that amending returns is easy-peasy are misplaced. No it isn't. It's easy if you've done it before. But the first time you change the oil in your car, or ride a bicycle, or amend a tax return, it is not easy. And when the payoff is $10 and might be something you don't particularly enjoy, people are going to come to different conclusions about what is a good use of their time.
My reason for amending the return is to get the "new" difficulties out of the way. IOW, use it for practice so that when the occasion rises later (fingers crossed that it won't), it will be "easy".
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Re: Corrected 1099-DIV: Do I have to amend my return?

Post by jebmke »

LadyGeek wrote:My reason for amending the return is to get the "new" difficulties out of the way. IOW, use it for practice so that when the occasion rises later (fingers crossed that it won't), it will be "easy".
That is a good reason. Amendments are easy -- usually simpler than doing the return in the first place. But it looks complicated. Doing one with a simple change that doesn't have much impact is a good way to get past the idea that it is difficult.

Same with Form 1116 - not really complicated if all you have is RIC investments and you follow the instructions.
Don't trust me, look it up. https://www.irs.gov/forms-instructions-and-publications
clutchied
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Re: Corrected 1099-DIV: Do I have to amend my return?

Post by clutchied »

Smilodon wrote:I received a corrected consolidated 2014 1099-DIV from my brokerage account today. The only change was to box 1b (Qualified Dividends). The value on the corrected 1099-DIV is slightly higher (by roughly $100) than on the original 1099-DIV. Other than that, the other boxes are identical - in particular box 1a (Total Ordinary Dividends) is the same value on both. So in summary, the correction is in my favor due to the lower tax rate on qualified dividends.

I would rather not go to the trouble to amend my 2014 federal return (already filed) since the tax savings would not be worth it to me. Or would the IRS object to my filed return not exactly matching the corrected 1099-DIV?

Thanks...
I would not. You basically paid slightly more tax than you should have. Some of your dividends were amended to a more favorable tax treatment.

It is not worth the fee or the time to amend. The IRS will not bother with it.

If it went the other direction I would amend.
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Re: Corrected 1099-DIV: Do I have to amend my return?

Post by House Blend »

jebmke wrote:Same with Form 1116 - not really complicated if all you have is RIC investments and you follow the instructions.
Wow. Good thing I didn't have a mouthful of coffee when I read that.

Try looking at it from the newbie perspective. No, it is not easy.

It takes quite a while to read through the instructions for Form 1116 before you see that 90% of it doesn't actually apply. Which 90%? Either that or you blindly trust your tax software to do it correctly (did you misunderstand the interview questions?), and don't care if it doesn't.
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Re: Corrected 1099-DIV: Do I have to amend my return?

Post by jebmke »

House Blend wrote:
jebmke wrote:Same with Form 1116 - not really complicated if all you have is RIC investments and you follow the instructions.
Wow. Good thing I didn't have a mouthful of coffee when I read that.

Try looking at it from the newbie perspective. No, it is not easy.

It takes quite a while to read through the instructions for Form 1116 before you see that 90% of it doesn't actually apply. Which 90%? Either that or you blindly trust your tax software to do it correctly (did you misunderstand the interview questions?), and don't care if it doesn't.
I don't use interview mode with tax software. I go straight to the forms. The interview questions are sometimes not worded very well and can be confusing. If the only FT is the FT withheld by a RIC, 1116 isn't really complicated at all. I should add that I am excluding the issue of carryback/carryover -- this is more complicated. I agree, there are large swaths of the instructions that don't apply but you can usually figure it out in the first sentence or two of the section and then cross out whole sections/pages that do not apply. Don't conflate complicated and time consuming.

Yes, it is a bit more complicated for a newbie but most newbies should have low FTC and be able to elect the short form.
Don't trust me, look it up. https://www.irs.gov/forms-instructions-and-publications
wfrobinette
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Re: Corrected 1099-DIV: Do I have to amend my return?

Post by wfrobinette »

I just amended my 2014 return yesterday because of a change in the way stock-options are handled on the 1099B and I received a 1098 from a mortgage broker that told me wouldn't be sending one. I netted a $15 refund above what I already paid.

Long story short, it took less than 15 minutes with Turbo Tax Online to make the change print my returns and send them off.

I'd rather correct it now than years from now.
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Re: Corrected 1099-DIV: Do I have to amend my return?

Post by grabiner »

jebmke wrote:Same with Form 1116 - not really complicated if all you have is RIC investments and you follow the instructions.
You probably haven't gotten it right if you think it isn't complicated; in particular, tax software can't get it right. (Usually, the failure to get it right won't matter.)

Suppose that you paid $5000 in state income tax last year. Your federal adjusted gross income was $100,000, which included $10,000 of foreign income. How much of your state income tax was directly connected with the foreign income?

You don't have enough information to answer that question yet, and neither does your tax software at the time it fills out the Form 1116, because it depends on your state income tax form which has not yet been filled out.

Now, suppose that your state adjusted gross income was $95,000 because you received a $1000 refund of state income taxes and earned $4000 on Treasury bonds, while the state taxed the same income otherwise. How much of your state income tax deduction was directly connected with the foreign income? What if your foreign income was $5000? For the answer, see IRS Publication 514, page 16 (the 2013 version is still at this link as of this posting).
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Re: Corrected 1099-DIV: Do I have to amend my return?

Post by abuss368 »

For the hassle involved for an impact of $15 or less, I would not bother.
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