Tax Season Jeopardy

1099-DIV

100

You will NOT receive the 1099-DIV for these investments, if your dividends or capital gains distributions in 2015 amounted to less than THIS AMOUNT:

What is $10

200

You most likely will not receive the 1099-DIV for THIS TYPE OF FUND

What are the Money Market Funds (because low interest rates have held yields down)

300

Some account types do NOT generate Forms 1099-DIV, regardless of how many dividends or capital gains there were. These include: **Hint: you work with these account types on a daily basis

IRAs and other tax-deferred retirement accounts

400

Accounts registered to nonresident aliens do NOT generate 1099-DIV. Non resident aliens will INSTEAD receive THIS FORM:

1042-S

500

Some account types do NOT generate Forms 1099-DIV, no matter how much they paid in dividends or capital gains. Name an example of an exempt account type registration.

Corporations, money purchase pension plans, profit-sharing plans, certain types of trusts, and charities are all examples of account registrations that do NOT generate Forms 1099-DIV.

Tax Forms/Taxes

100

When a client sells shares, he or she must report his or her gains or losses to the Internal Revenue Service (IRS) on THIS FORM:

What is Form 1040, Schedule D. *Note: CB is an important calculation used to determine gains and losses on any shares sold in TAXABLE (NONRETIREMENT) ACCOUNTS.

200

Conversions are coded as an early distribution with an exception on THIS TAX FORM.

What is the 1099-R. *Note: Vanguard generates the corresponding 5498 in May after the April 1st deadline for contributions to IRAs for the prior tax year has passed.

300

This tax form reports IRA contributions, incoming rollovers, conversions and recharacterizations.

What is the 5498

400

Under THIS, affected children must pay tax on unearned income (such as dividends) at their parent's marginal tax rate (the rate of tax on the last dollar earned). Earned income, such as wages, received by a child of any age are taxed at the child's marginal tax rate.

What is the "Kiddie Tax"

500

Clients will receive three copies of THIS TAX FORM: Copy 2 (File this copy with your state, city, or local income tax return, when required); Copy B: Report this income on your federal tax return. If this form shows federal income tax withheld in box 4, attach this copy to your return; and Copy C: For recipient's records

What is the 1099-R

Witholding and Penalties

100

When Vanguard files Forms 1099 (1099-DIV, 1099-B, 1099-INT (brokerage only), 1099-OID, 1099-MISC) with the IRS, the IRS checks whether a name/TIN (taxpayer identification number) combination is correct by matching it with the name/TIN combination contained in the IRS's database. A backup withholding system requires Vanguard to deduct and withhold income tax from reportable payments, such as dividends, capital gains and redemptions, if a client is the recipient of THIS: Note: The amount withheld is paid to the IRS. The IRS may refund this amount when the client files their tax return. Vanguard will not refund backup withholding.

What is a B-NOTICE *Note: The name-and-TIN combination may not match if the client has gotten married or divorced and did not notify Vanguard of the name change. Another reason for the mismatch may be that a custodial account has the custodian's TIN listed on the Vanguard account registration rather than the principal's TIN (e.g., a minor).

200

THIS LETTER informs the client that the IRS has notified Vanguard that the client has underreported his or her dividend/capital gain income. Vanguard will withhold the current federal backup withholding rate from reportable dividends and capital gains until IRS notification is received to stop backup withholding

What is the C-Notice letter **Note: If a client calls in reference to a C-Notice (underreporter) letter, instruct the client to call the Internal Revenue Service for instructions to resolve the problem. The IRS Information Line is 1-800-829-1040

300

THIS is a legal seizure of a taxpayer’s property to satisfy a tax debt. THIS actually takes the property to satisfy the tax debt. The IRS can take property that is owned by the taxpayer but is held by someone else (such as wages, retirement accounts, dividends and bank accounts) if a taxpayer does not pay their taxes.

What is a LEVY

400

If a levy is received on an account that has the checkwriting option, Tax Reporting associates will place THIS CODE on the account(s) with an alert to contact Individual Tax Reporting. Pending Codes are placed on the account regardless of the account's value.

What is "pending code 230" (contact me immediately)

500

Nonresident alien withholding applies to IRA and Qualified Plan distributions paid to foreign persons (nonresident aliens). Distributions are subject to WHAT kind of rate?

What is a 30% nonresident alien withholding rate. Note: Income tax treaties between the U.S. and other countries may reduce the withholding rate.

Vanguard.com

100

What is the name of the place where you can find all your Vanguard dividends and capital gains, as well as your tax forms when they are available?

What is the Tax Center

200

Where can we find cost basis on WAVE or online? CB information is viewable from THIS SCREEN and THIS SCREEN

What are Cost Basis Account Summary Screen and the Statements screen

300

THESE PDFs are available to Vanguard clients for more information about specific tax forms and tax topics. You can find these by logging onto your Vanguard account and visiting the Tax Center

What are TAX BROCHURES

400

Clients can use this software, which does all the calculations and guarantees them to be 100% accurate. And if you pay an IRS or state penalty or interest because of a calculation error, Intuit, makers of THIS SOFTWARE, will pay you the penalty and interest.

What is TURBOTAX

500

Use THIS TOOL to determine THIS for taxable Vanguard mutual funds. THESE are eligible for a lower tax rate than other ordinary income and are reported to you in Box 1b of Form 1099-DIV. You'll need to report your personal THIS from all investments to the IRS on line 9b of Form 1040 or 1040A.

QDI Income Tax Tool Also: your QDI; Qualified Dividends; QDI

Misc.

100

For most of the nation (for all US residents except for residents of MA or ME), the deadline to submit 2015 tax returns is THIS DATE, rather than the traditional April 15 date.

What is Monday, April 18, 2016. *Note: It's a day later for residents of MA and ME, who have until Tuesday, April 19, 2016 to file. Why? Holidays: •Washington, D.C. celebrates Emancipation Day, the anniversary of Lincoln's signing of the Emancipation Proclamation on April 15. •Massachussetts and Maine celebrate Patriots Day, which commemorates the battles of Lexington and Concord in 1775, on April 18.

200

Under IRS tax rules, the deduction of a loss on WHAT is disallowed. WHAT occurs when an individual sells or trades a security at a loss and, within 30 days before or after this sale, buys a substantially identical stock or security?

What is a WASH SALE *Note: The amount of loss that's disallowed due to a wash sale is added to the basis of the acquired security.

300

You can use the Vanguard QDI Tax Tool for your taxable Vanguard mutual fund accounts if we issued you a Form 1099-DIV. However, CERTAIN FUND TYPES are INELIGIBLE to receive or distribute QDI, such as:

Money Market funds or bond funds (because dividends from these fund types are not eligible for the lower tax rates, so these funds will not distribute QDI)

400

The calculation of cost basis includes reinvested dividends and capital gains distributions, as well as THESE and THESE that were paid when shares were purchased, since these are considered to be purchases for tax reporting reasons.

What are SALES CHARGES and TRANSACTION FEES

500

The federal government introduced new tax-reporting requirements for financial institutions by passing THIS ACT. As such, Vanguard and other broker-dealers are now required to report the adjusted cost basis for "covered" securities sold in taxable accounts to their clients and to the IRS on Form 1099-B. For "noncovered" securities, Vanguard continues to report cost basis information only to our clients. The new reporting requirements of THIS ACT took effect in 2011.

Emergency Economic Stabilization Act of 2008