Understanding the difference between IRS 1099-B and IRS 1099-LTC

Last updated on Dec 8, 2025

What is IRS 1099-B?

The IRS 1099-B is a tax form used to report proceeds from broker and barter exchange transactions. This form is essential for individuals and businesses engaging in the sale of stocks, bonds, or other securities. By tracking these transactions, the IRS can ensure that taxpayers accurately report their capital gains and losses.

1.

You may need IRS 1099-B if:
2.

You sold stocks or bonds during the tax year.
3.

You participated in a barter exchange.
4.

You received proceeds from a liquidation of a business or entity.

Who needs to complete a IRS 1099-B?

The IRS 1099-B is typically completed by brokers, barter exchanges, and other financial institutions. Taxpayers who receive this form use it to report their earnings and losses on their tax returns.

1.

Typically required for:
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Individuals who sold stock or other securities.
3.

Brokers submitting reporting information for clients.
4.

Barter exchanges where trading of goods occurs.
5.

Fiduciaries managing investment accounts.

When is IRS 1099-B due?

The IRS 1099-B must be sent to the recipient by February 15 of the following tax year. Additionally, the form must be filed with the IRS by the end of February (if filing on paper) or the end of March (if filing electronically).

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What is IRS 1099-LTC?

The IRS 1099-LTC is a tax form used to report long-term care (LTC) benefits. This form is crucial for individuals who receive payments or reimbursements from long-term care insurance policies. The IRS uses this information to track the extent of benefits received and their tax implications.

1.

You may need IRS 1099-LTC if:
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You received long-term care payments from an insurance policy.
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You were reimbursed for long-term care services.
4.

You received benefits for chronic illnesses.

Who needs to complete a IRS 1099-LTC?

Insurance companies and other entities that provide long-term care benefits are responsible for completing IRS 1099-LTC forms. Recipients will use this information to report benefits received on their tax returns.

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Typically required for:
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Insurance companies paying out long-term care benefits.
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Policyholders receiving benefits from their insurance.
4.

Tax professionals preparing tax returns for those who received LTC benefits.
5.

Beneficiaries of deceased individuals who received LTC payments.

When is IRS 1099-LTC due?

The IRS 1099-LTC must be sent to recipients by January 31 of the following tax year. The form must also be filed with the IRS by February 28 for paper submissions or March 31 for electronic filings.

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Key differences between IRS 1099-B and IRS 1099-LTC

While both IRS 1099-B and 1099-LTC are essential tax forms, they serve different purposes. Understanding their distinctions can easily guide you on which one you may need.

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Main differences include:
2.

IRS 1099-B is for reporting capital gains from sales, while 1099-LTC reports long-term care benefits.
3.

Form 1099-B is typically issued by brokers or financial institutions, whereas 1099-LTC is issued by insurers.
4.

1099-B is used for reporting investment-related income, while 1099-LTC pertains to healthcare-related benefits.
5.

Filing dates for 1099-B tend to be later in the season than those for 1099-LTC.

Understanding potential penalties

Tax penalties arise when forms are incorrectly filed or submitted late, impacting your tax obligations and potentially leading to fines. It’s crucial to understand the implications of failing to comply with these requirements.

Incorrectly filing or failing to submit IRS 1099-B can lead to significant penalties. The IRS imposes fines based on the lateness of your submission and the volume of 1099s filed incorrectly. For example, fines can reach up to $130 per form per year, with a maximum penalty of $1.9 million for large businesses.

Similar to 1099-B, filing the IRS 1099-LTC incorrectly can also incur penalties. The IRS applies fines if the form is not submitted on time, potentially reaching $260 per form, with maximum penalties also varying based on the business size and number of forms.

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Author:

by Iryna Marchuk

Lead Writer/Blogs Manager at airSlate

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