Introduction to tax forms 

Introduction to tax forms 

Schwab produces specific tax documents based on the type of account and reportable income received. The client will only receive the form(s) applicable to their financial situation. The amounts on the form(s) are reportable for the tax year indicated on the tax document.

The Form 1099 Composite combines the 1099-DIV, 1099-INT, 1099-MISC, 1099-OID and 1099-B tax forms, along with the Year-End Summary report and is needed when the client is reporting taxable income to the Internal Revenue Service (IRS). For additional information related to each tax form, refer to Tax form reporting.

Tax FormDescription
Form 1099-DIVReports dividend, capital gain, nondividend distributions (return of capital) and liquidation distributions earned by a client during the tax year. The form also reports any foreign tax paid and tax withheld.
Form 1099-INTReports interest earned by taxable and tax-exempt interest-bearing securities (including accrued interest from the sale or exchange of securities), bond premium Tooltip amortized and specified private activity bond interest. If the client has elected to do so, the form may also report the accreted market discount Tooltip for only covered taxable and tax-exempt bonds. Foreign tax paid and any tax withheld are also reported.
Form 1099-MISCReports income received for royalties and substitute payments in lieu (PIL) Tooltip of dividends and interest including federal and/or state income tax withheld.

Additional income received, such as consent payments, contract fees, etc. is reported on the Form 1099-MISC Standalone due to IRS regulations.
Form 1099-OIDReports any original issue discounts Tooltip (OIDs) accrued for the current year for taxable and tax-exempt positions Tooltip subject to OID reporting as well as market discount, acquisition premium Tooltip , bond premium and federal income tax withheld.
Form 1099-B

Reports the sale or exchange of capital assets, including cost basis, accrued market discount, wash sale disallowed loss, and principal payments.
For a detailed breakdown of commonly questioned transactions reported on Form 1099-B, see Form 1099-B reporting scenarios. The scenarios include:

  • Corporate actions
  • Gifts
  • Options
  • Return of capital
  • Missing cost basis
  • Cost basis displayed as not provided
  • Short sales
  • Stepped-up cost basis
  • Wash sales
  • Unissued rights redemptions

The client may receive one or more of the forms below in addition to or in lieu of a Form 1099 Composite. For additional information related to each tax form, see Tax form reporting.

Tax FormDescription
Form 1042-SReports to clients and the IRS all income earned from U.S. sources by a non-resident alien (NRA), except gross proceeds from sales and foreign source income; whether that income is subject to the NRA tax and if subject to tax, the amount of tax withheld.
Form 1099-NECReports nonemployee compensation which includes investment manager fees paid to fee accounts not classified as an S or C Corporation with the IRS and tax withheld, if any.
Form 2439Reports the undistributed long-term capital gains of Regulated Investment Companies (RICs) or Real Estate Investment Trusts (REITs) and the related tax paid at the RIC/REIT level on the shareholder's behalf.
Form 480.6AReports income not subject to Puerto Rico withholding to residents of Puerto Rico.
Form 480.6BReports income subject to Puerto Rico withholding to residents of Puerto Rico.
Form 480.6CReports income paid from entities which earn 80% or more of their income from Puerto Rican sources and are subject to Puerto Rico withholding tax to non-residents of Puerto Rico.
Form 480.6DReports exempt interest earned or paid from U.S. and Puerto Rican obligations to residents of Puerto Rico.
Form 990-TReports the amount of unrelated business taxable income (UBTI) earned and the amount of tax due. It is only generated by Schwab if the unrelated business income (UBI) earned in a retirement account is over $1,000.

For information to assist the client, see Introduction to tax forms production.
Schedule K-1Reports the income, gains, losses, and deductions of certain investments. This form is used to determine UBTI in retirement accounts. It is not produced by Schwab.
Standalone 1099-MISCReports items such as consent payments, contract fees, rental income from Unit Investment Trusts, customer service gestures, restorative payments, payment in lieu of dividends for corporate accounts, etc.
Substitute OID (REMIC)Reports the amount of Original Issue Discount (OID) and accrued interest earned on mortgage-backed securities issued at a discount based on the difference between the stated redemption price (at maturity) and the original issue price (not purchase price).

Why didn't my client get a tax form?
The client may not have received a tax form for the following reasons:

  • The amount of reportable income is not enough to trigger a tax form.
  • There weren't transactions in the account generating reportable income.
  • The account type is not subject to tax reporting by Schwab. For further information, see Introduction to account type tax reporting.

Can Schwab divide the amount of income reported for two or more people or for specific timeframes on different tax forms for the same account?
Schwab cannot produce multiple tax forms for the same account to divide the amount of income reported among two or more people or based on a specific date during the year. The client will have to do a nominee filing if the income is to be divided among multiple parties.

Introduction to account type tax reporting
Introduction to tax forms production
Introduction to payment in lieu of dividends (PILs)

See the following resources to assist you with tax forms:

If you have questions about cost basis reporting, statement preferences, and tax reporting, contact your service team or call Advisor Services Cost Basis Service Tooltip at 877-762-6446.