What form do financial institutions typically use to report dividends?

Financial institutions typically use Form 1099-DIV to report dividends that they distribute to shareholders. This form specifically details the amounts of dividends received throughout the tax year, including ordinary dividends and qualified dividends, and is used by taxpayers when filing their income tax returns.

This form is crucial for taxpayers as it allows them to accurately report their dividend income, which is essential for determining their tax liability. Taxpayers must include any dividends reported on Form 1099-DIV when they prepare their tax returns, as these amounts can impact their overall taxable income.

In contrast, Form 1040 is the standard individual income tax return that taxpayers file to report all income sources, while Form W-2 is used by employers to report wages and salary paid to employees, not dividends. Schedule B is used for reporting interest and ordinary dividends but does not serve as the primary reporting form; rather, it complements other forms like the 1040 by providing details about dividends.