Definition
This checklist helps U.S. income investors organize a year-end review of taxable accounts. It is an educational reconciliation workflow, not tax filing software or an authoritative cost-basis ledger. Retirement accounts, foreign investors, partnerships, and unusual corporate actions require different treatment. Take unresolved items to your broker or tax professional.
Why It Matters
Cash paid, income reinvested, and tax character answer different questions. A year-end review catches incomplete account history and provisional classifications before they become mistaken filing assumptions.
Before Year-End
- List your accounts and their tax types. Record the year and whether your review covers all accounts or selected accounts, including accounts closed or transferred during the year.
- Save broker statements, distribution detail, trade confirmations, and DRIP purchases. Include exited positions: a current-holdings view can omit cash they paid earlier in the year.
- Separate received payments from declared but unpaid distributions and projections. Check ownership periods and retain any manual dividend edits alongside the broker evidence.
- Record gross distributions, withholding, reinvestment, and cash credited separately. Reinvested income can be reportable even though no spendable cash reaches your bank.
- Label issuer Section 19(a) notices preliminary, and save the year-end issuer tax supplement or Form 8937 when available. Do not convert an estimated ROC percentage into a final tax entry.
Broker records are the starting evidence, not necessarily the final resolution of a discrepancy. Transfers, missing history, timing, and corrected classifications can all require follow-up. Check the selected account and received-history completeness on mobile as well as desktop.
After Tax Documents Arrive
Use the appropriate year's final or corrected forms. Compare the issuer's final tax information with the broker's 1099 detail, and ask the broker to explain discrepancies before filing. The IRS Form 1099-DIV instructions distinguish:
| Item | Common 1099-DIV box | Reconciliation question |
|---|---|---|
| Ordinary dividends | 1a | Does the gross total include DRIP amounts? |
| Qualified dividends | 1b | This is a subset of 1a; have you avoided adding it twice? |
| Capital-gain distributions | 2a | Is this a fund distribution, separate from your sale proceeds? |
| Nondividend distributions / ROC | 3 | Does the adjusted basis reflect the final amount? |
| Federal income tax withheld | 4 | Is withholding separate from gross income? |
| Exempt-interest dividends | 12 | Are you checking any separate state or AMT treatment? |
These boxes are not an exhaustive filing guide. Holding-period requirements can affect qualified dividend eligibility. Other forms, such as 1099-INT and 1099-B, cover different items. Certain fund distributions paid in January can be treated as received in the preceding year; do not force calendar cash dates to equal the tax reporting year. Consult IRS Publication 550 for the applicable rules.
Example
Worked Reconciliation: Cash, DRIP, and Tax Character
Assume a hypothetical taxable fund position has $1,200 gross distributions for the year. Of that, $900 goes to cash and $300 buys additional shares at market price, with no withholding, fees, discounted DRIP shares, or other adjustments. The final statement reports:
| Final item | Amount |
|---|---|
| Box 1a ordinary dividends | $700 |
| Box 1b qualified subset of Box 1a | $200 |
| Box 2a capital-gain distributions | $100 |
| Box 3 nondividend distributions | $400 |
The gross total is $700 + $100 + $400 = $1,200, not $1,400. The qualified subset does not add another payment. Bank cash of $900 alone misses the $300 reinvestment. The tax split is also different from the split between cash and reinvestment.
Assume all $400 ROC belongs to the original eligible lots and the new reinvestment lots have no subsequent basis adjustments. If those original lots have $10,000 basis, ROC reduces it to $9,600. The separate $300 market-price reinvestment creates new lots with $300 purchase basis, giving $9,900 aggregate basis in this simplified example. Allocate adjustments to the correct lots and dates; do not simply change all shares' basis equally after purchases or sales. Discounted DRIP shares can have additional income and fair-market-value basis rules.
If instead an eligible lot has only $150 remaining basis before a $200 ROC payment, its basis reaches zero and the $50 excess is generally capital gain. Holding period affects whether it is short- or long-term. See the IRS publication and the existing ROC lesson before applying these examples to real records.
Preliminary Is Not Final; Special Is a Separate Label
An issuer's current notice can change after year-end. For example, Cornerstone's September 2026 notice provides estimated sources and explicitly says they are unsuitable for tax reporting. Its 2025 Form 8937 is an example of later issuer information describing distribution character and basis effects. Neither document determines another fund's treatment or your personal tax outcome.
A Dividend Vision Special label describes payout behavior and may exclude a payment from recurring-income projections. It does not establish ordinary income, capital gain, or ROC. Keep the recurring-income decision and final tax character separate. Likewise, the Tax Estimator is a planning estimate, not final classification or filing evidence.
Printable Closeout Checklist
- [ ] Account list includes closed, transferred, and retirement accounts, clearly separated.
- [ ] Received history and ownership periods checked against statements, including exited holdings.
- [ ] Gross payments reconcile to cash, DRIP purchases, and withholding, with differences explained.
- [ ] Preliminary notices are stored separately from final and corrected tax documents.
- [ ] Qualified dividends are counted within ordinary dividends, not added again.
- [ ] ROC adjustments and reinvestment lots checked with broker basis records.
- [ ] Sales, transfers, special payments, and tax-year timing exceptions reviewed.
- [ ] Unresolved discrepancies documented for the broker or preparer; corrected forms retained.
Print this page or copy the checklist into your private records. Record the review date and document version so a later corrected 1099 does not silently replace the evidence you used.
Common Mistakes
- Matching a forward annual estimate to year-end received cash without checking account scope.
- Treating distributions as spendable cash when DRIP or withholding is active.
- Using a Section 19(a) estimate, Special label, or app export as final tax classification.
- Assuming the current portfolio includes the year's entire distribution history.
FAQ
Should Dividend Vision and my 1099 totals match exactly?
Only after matching account scope, dates, completeness, and the meaning of each total. Received cash, gross distributions, current-position projections, and tax-year amounts can differ. Investigate the difference; do not overwrite broker evidence just to make totals agree.
What if the broker sends a corrected 1099?
Keep both versions, reconcile the changed entries, and consult your preparer about any action needed if you already filed. A preliminary issuer estimate does not override a corrected form.
