2012 Tax Guide - Frequently Asked Questions
Q. Does information on my tax forms get reported to the IRS?
A. Yes, Domini reports this information to the IRS using the appropriate forms. Generally, Forms 1099-DIV, 1099-INT, 1099-B, 1099-R, and 1099-Q will be reported on or before March 31, 2013. Forms 5498 and 5498-ESA will be reported on or before May 31, 2013.
Q. What do I do if my Tax ID Number printed on the form is incorrect?
A. To change your Tax ID number on file with us, please send us a Form W-9 with your correct Tax ID number. You can obtain Form W-9 at your local post office, online at www.irs.gov or by calling us toll-free at 1-800-582-6757.
Q. What is a capital gain/loss?
A: A Capital Gain/Loss (Personal) results when an individual sells mutual fund shares for a profit/loss and is the difference between an asset’s purchase price and selling price. A Capital Gain Distribution (Portfolio) results when a net profit is made by the mutual fund in buying and selling portfolio holdings during a given year. The IRS considers capital gains distributions from a mutual fund as a taxable activity, even if the shareholder reinvests the proceeds back in the fund.
Q. Will my conversion from a Traditional IRS to a Roth IRA affect my tax return?
A. Yes, converting from a Traditional IRA to a Roth IRA is reportable to the IRS. Please consult your tax advisor for assistance.
Q. Does Domini have a tax advisor or anyone who can help me fill out my return?
A. Our telephone call center personnel will be happy to help you with questions and information about your accounts; however, we cannot provide tax, legal or investment advice. For assistance in filling out your return, you should contact your professional advisor for such advice.
Q. Why doesn’t the income on my Form 1099-DIV match the amounts on my year-end or quarterly statements?
A. Occasionally, mutual funds determine that income previously distributed to shareholders as one type of income may need to be reclassified as a different category of income for tax reporting purposes. For example, qualified dividend income is not segregated from non-qualified dividend income on your periodic statements, but it is correctly broken out in box 1b on your 2012 Form 1099-DIV. Another example is if a tax-exempt dividend distribution must be reclassified as a taxable distribution.
Q. Where is my Cost Basis Statement?
A. Beginning January 1, 2012, reportable redemptions from your non-retirement account will display the appropriate gain/loss information categorized by section on Form 1099-B if certain data is available. This requirement was enacted as part of the Energy Improvement and Extension Act of 2008. Essentially, the data that had been displayed on a separate Cost Basis Statement is now reported on Form 1099-B. Depending on the information available, cost basis data may also be reported to the IRS.
This information is intended for general informational purposes only. It is not meant to be a substitute for professional tax advice. Please consult a professional advisor to determine your individual tax situation and for tax, legal, and investment advice. The information set forth above concerns only federal income tax, not state or local income tax, except where specifically noted.
Please refer to the Instructions for Recipients on the back of your income tax forms. Please also refer to IRS Publication 564, Mutual Fund Distributions, and IRS Publication 590, Individual Retirement Arrangements (IRAs) available at www.irs.gov or by calling the IRS at 1-800-TAX-FORM (1-800-829-3676).