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

Last updated on Dec 8, 2025

What is IRS 1099-B?

The IRS 1099-B form is used to report the proceeds from broker and barter exchange transactions. This form is crucial for taxpayers who engage in selling stocks, bonds, or other securities, providing them with key information needed for reporting capital gains and losses.

Its primary purpose is to summarize transactions that result in taxable income for the individual or business who sold an asset during a tax year.

1.

You may need IRS 1099-B if you sell stocks, bonds, or mutual funds through a broker.
2.

You sell other securities or commodities like cryptocurrencies.
3.

You are involved in barter transactions where goods or services were exchanged for cash or other services.

Who needs to complete a IRS 1099-B?

Typically, individuals and entities that engage in securities transactions and realize gains or losses need to complete the IRS 1099-B form.

1.

Individuals who sell stocks, bonds, or mutual fund shares through a broker.
2.

Businesses that engage in barter exchanges or related transactions.
3.

Anyone participating in cryptocurrency trading through a platform.
4.

Investors with capital gains or losses to report.

When is IRS 1099-B due?

The IRS 1099-B form must be submitted to the IRS by February 28 if filed on paper or by March 31 if filed electronically. Recipients should receive their copies by mid-February, allowing them ample time to prepare their tax returns.

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What is IRS 1099-R?

The IRS 1099-R form is utilized to report distributions from pensions, annuities, retirement plans, and other income sources. This form is vital for taxpayers who withdraw or receive payments from retirement accounts.

It serves to document the taxable amount of these distributions, facilitating accurate income reporting during tax filing.

1.

You may need IRS 1099-R if you receive distributions from employer-sponsored retirement plans.
2.

You withdraw funds from an IRA or similar retirement accounts.
3.

You receive annuity payments or pensions.

Who needs to complete a IRS 1099-R?

Those receiving distributions from qualified retirement accounts or plans typically need to complete the IRS 1099-R form.

1.

Individuals accessing funds from their retirement plans or IRAs.
2.

Beneficiaries of deceased individuals’ retirement accounts.
3.

Employees receiving pension payments.
4.

Individuals who have taken early distributions and may face penalties.

When is IRS 1099-R due?

The IRS requires filing the 1099-R form by January 31 for distributions made in the previous tax year. This deadline ensures that recipients have the necessary information to accurately report their income.

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

The IRS 1099-B and 1099-R forms serve different purposes and cater to different financial activities. Understanding these differences is essential for accurate tax reporting.

1.

IRS 1099-B pertains to the sale of securities, while 1099-R relates to retirement distributions.
2.

1099-B indicates capital gains or losses; 1099-R reports pension and retirement income.
3.

Filing deadlines for 1099-B are later than 1099-R, with 1099-B due by the end of February or March, while 1099-R is due by January 31.
4.

Completing 1099-B often involves multiple transactions per year; 1099-R typically relates to single or periodic distributions.

Understanding potential penalties

Tax penalties arise when taxpayers fail to file the correct forms or do so late. It's essential to be aware of these penalties to avoid unnecessary fines and interest on owed amounts.

Failure to file the IRS 1099-B by the due date can result in significant penalties. The fines can range from $50 to $270 per form, contingent on how late it is filed. In worse scenarios, if the IRS deems that there was intentional disregard for the filing requirements, penalties can increase significantly.

Similarly, late or inaccurate filing of the IRS 1099-R can attract penalties. The fines start at $50 and can rise to $260 per form. If discrepancies are found, the IRS may impose additional fines, emphasizing the necessity for accurate reporting.

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Author:

by Iryna Marchuk

Lead Writer/Blogs Manager at airSlate

Disclaimer: This content is for informational purposes only. It is not legal or other professional advice. airSlate provides this material on an "as-is" basis and disclaims all representations, guarantees, or warranties, whether express, implied, or statutory, including but not limited to warranties of merchantability, fitness for a particular purpose, or accuracy.