So our club just formed in 2020. We do DRIP on all stocks purchased. We got a notice that we will not be getting a 1099. So now what? Do we still prepare the K-1 for all members. How does this work for tax preparation?
Laurie Frederiksen on
Hi Barbara,
Congratulations on starting a club!
Just so you are aware, we highly recommend against doing automatic dividend reinvesting. Over any length of time, it will make it almost impossible to keep your club accounting accurately. Here is more about this topic:
By far the majority of the clubs that have problems at tax time are those who are or have done automatic dividend reinvesting.
If you received dividends you have taxable income to report, whether or not you get a 1099 form.
The IRS will be looking for a tax form from your EIN number. To avoid extremely large penalties you should prepare and file it.
Fortunately, that should be pretty easy for you to do in bivio.
If you don't have a 1099 to use to verify your records you'll need to use your monthly statement information and other reports you can get from your brokers website.
Laurie Frederiksen Invest with your friends! www.bivio.com
So our club just formed in 2020. We do DRIP on all stocks purchased. We got a notice that we will not be getting a 1099. So now what? Do we still prepare the K-1 for all members. How does this work for tax preparation?
bdoherty on
Thank you,
I can bring this feedback to our next meeting with a proposal to end all DRIP.
From: club_cafe@bivio.com <club_cafe@bivio.com> On Behalf Of Laurie Frederiksen Sent: Wednesday, February 3, 2021 11:31 AM To: The Club Cafe <club_cafe@bivio.com> Subject: Re: [club_cafe] 1099 wisconsin
Hi Barbara,
Congratulations on starting a club!
Just so you are aware, we highly recommend against doing automatic dividend reinvesting. Over any length of time, it will make it almost impossible to keep your club accounting accurately. Here is more about this topic:
By far the majority of the clubs that have problems at tax time are those who are or have done automatic dividend reinvesting.
If you received dividends you have taxable income to report, whether or not you get a 1099 form.
The IRS will be looking for a tax form from your EIN number. To avoid extremely large penalties you should prepare and file it.
Fortunately, that should be pretty easy for you to do in bivio.
If you don't have a 1099 to use to verify your records you'll need to use your monthly statement information and other reports you can get from your brokers website.
Laurie Frederiksen Invest with your friends! www.bivio.com
So our club just formed in 2020. We do DRIP on all stocks purchased. We got a notice that we will not be getting a 1099. So now what? Do we still prepare the K-1 for all members. How does this work for tax preparation?
Colleen Goings on
We learned the hard way with drips. You will be better off in the long run.
Just so you are aware, we highly recommend against doing automatic dividend reinvesting. Over any length of time, it will make it almost impossible to keep your club accounting accurately. Here is more about this topic:
By far the majority of the clubs that have problems at tax time are those who are or have done automatic dividend reinvesting.
If you received dividends you have taxable income to report, whether or not you get a 1099 form.
The IRS will be looking for a tax form from your EIN number. To avoid extremely large penalties you should prepare and file it.
Fortunately, that should be pretty easy for you to do in bivio.
If you don't have a 1099 to use to verify your records you'll need to use your monthly statement information and other reports you can get from your brokers website.
Laurie Frederiksen Invest with your friends! www.bivio.com
So our club just formed in 2020. We do DRIP on all stocks purchased. We got a notice that we will not be getting a 1099. So now what? Do we still prepare the K-1 for all members. How does this work for tax preparation?