Question

What is section 199A dividends in Box 5 on Form 1099-DIV?

Forum|Forum|7 years ago
June 3, 2019
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TurboTax Premier Online

It was added to the 1099-DIV this year in order to aid in the calculation of Section 199A, also known as the Qualified Business Income Deduction.

According to the IRS:

"New box 5 section 199A dividends. Box 5, section 199A dividends, must be completed to report section 199A dividends paid to the recipient. The amount paid is also included in box 1a."

https://www.irs.gov/pub/irs-prior/i1099div--2018.pdf

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choeni1216

Every year I get $25 from my old employer. This year when I got my 1099 Dividend form all the boxes except #5, which contained $25 in it, were blank. After completing my taxes, Turbo kept noting I needed to "review" a section. I ended up paying extra to speak with a person. I was told to just enter the $25, as I had done and continue, which I did. Still, got the message that it needed to be reviewed. Was told to disregard it and continue. I did. This was the only review required; however, when I went to "e-file", I kept getting thrown out and told I had to mail my return do to the failure to "review". Is my 1099 incorrect or is there no process in Turbo to "fix" this so I can file electronically. Seems that I wasted $20 to talk to someone who could not correct the problem and is making me nervous that my tax return is incorrect.

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JamesG1

What version of TurboTax are you using?

I would suspect that you would need Deluxe, Premier, or above to compute the QBI deduction that Section 199A dividends incur.

From this IRS Publication here.

“Below are answers to some basic questions about the new qualified business income (QBI) deduction, also known as the section 199A deduction, that may be available to individuals, including many owners of sole proprietorships, partnerships and S corporations. Some trusts and estates may also be able to take the deduction. This deduction, created by the 2017 Tax Cuts and Jobs Act, allows non-corporate taxpayers to deduct up to 20 percent of their QBI, plus 20% of qualified real estate investment trust (REIT) dividends and qualified publicly traded partnership (PTP) income.”

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choeni1216

Thanks for the quick response. I am already using Turbo Tax Live Deluxe. This cost an additional $20 for talking to a "live" person to correct any errors. However, as noted earlier, the person I spoke with didn't correct this and just told me hit continue. Turbo is still telling me I needed to revisit this section and correct it. I cannot e-file since I can't fix it. Turbo is telling me since I haven't fixed it that I have to mail my taxes. I was going to do that but I have been using Turbo for the last 7 years and other than the 5 printed Turbo pages, I do not know what attachments to send. I used to have to file 1099 forms, donation worksheets, etc. I spent $140 on this and for the first time, I do not feel comfortable filing because I am afraid of an error.

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Anonymous

certain dividends from Real Estate Investment Trusts (non-qualified) also included in box 1 total dividends. if it's small and you don't want to bother with the 199A deduction (20%) that it produces leave box 5 blank

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golfer1john

On what form do I deduct the 20%?

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JohnW152

TurboTax will compute QBI for you.

If you qualify for a qualified business income deduction, it'll appear on line 10 of Form 1040.

To see if you qualify for the deduction, please see the TurboTax Help article "Do I qualify for the qualified business income deduction?".

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Captain Randy

Just as an update for this thread for 2020 taxes. QBI deductions are now on Form 1040 line 13 and TurboTax Deluxe handles QBI for 199A dividends and completes Form 8995. If you receive a 1099 Div with a Line 5 amount just check Form 1040 line 13 to determine if you got the deduction. Under most circumstances the deduction amount should be 20% of the Line 5 amount.