Understanding the difference between IRS 1099-DIV and IRS 1099-LS

Last updated on Dec 8, 2025

What is IRS 1099-DIV?

The IRS 1099-DIV form is used to report dividends and distributions to taxpayers. This form details income earned from dividends and distributions of stock or mutual funds during the tax year.

It is important for individuals and businesses that receive dividends from stock or mutual fund investments. Proper reporting ensures compliance with tax obligations.

1.

You may need IRS 1099-DIV if:
2.

You received dividends from stocks or mutual funds.
3.

You have capital gains distributions.
4.

Your investment firm sends you a dividend or distribution that totals $10 or more.

Who needs to complete an IRS 1099-DIV?

This form is typically required by anyone who fulfills the qualifying criteria, ensuring that all dividend income is accurately reported.

1.

Typically required for:
2.

Corporations paying dividends to shareholders.
3.

Investment firms distributing gains to their investors.
4.

Mutual fund companies making distributions to their shareholders.
5.

Any entity that distributes dividends to individuals or other entities.

When is IRS 1099-DIV due?

The IRS 1099-DIV is due to recipients by January 31 of the following year and must be filed with the IRS by February 28 if filing by paper or March 31 if filing electronically.

Fill out IRS 1099-DIV online

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What is IRS 1099-LS?

The IRS 1099-LS form is meant for reporting certain large payments made to contractors and other non-employees, typically in situations involving the sale of a property.

This form is used to report payments for specified types of transactions, especially when the amount exceeds a certain threshold. It helps ensure accurate reporting for tax purposes.

1.

You may need IRS 1099-LS if:
2.

You made payments of $600 or more for certain real estate transactions.
3.

You participated in a sale or exchange of property?
4.

You need to report payments from a buyer or seller.

Who needs to complete an IRS 1099-LS?

This form is mainly for businesses and individuals who engage in real estate transactions that meet the IRS criteria.

1.

Typically required for:
2.

Individuals selling or buying real estate properties.
3.

Businesses involved in real estate transactions.
4.

Real estate brokers facilitating sales.
5.

Any entity making qualifying large payments in a real estate context.

When is IRS 1099-LS due?

IRS 1099-LS must be provided to recipients and filed with the IRS by January 31 following the calendar year in which the transactions occurred.

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Key differences between IRS 1099-DIV and IRS 1099-LS

While both forms are used for reporting income, they cater to different types of income and transactions.

1.

Main differences include:
2.

IRS 1099-DIV is used primarily for reporting dividend income, while IRS 1099-LS is for reporting payments related to real estate transactions.
3.

The 1099-DIV form specifically details dividends and distributions, but the 1099-LS reports only designated large payments.
4.

Deadlines for filing and recipient notification can vary between the two forms, influencing compliance strategies.
5.

The recipients of the forms differ—1099-DIV often goes to shareholders, whereas 1099-LS goes to parties involved in real estate transactions.

Understanding potential penalties

Filing tax forms accurately and on time is crucial to avoid penalties. The IRS imposes fines for late or incorrect submissions, impacting both individuals and businesses financially.

Failing to file or providing incorrect information on IRS 1099-DIV can lead to penalties. Fines can range from $50 to $270 per form, depending on how late the form is filed, with a maximum cap that can exceed $1 million for larger businesses.

Similar to other 1099 forms, not filing IRS 1099-LS or submitting incorrect details results in penalties. The fines can also vary based on the timeline of submission and severity of the error, with late filing fines escalating over time.

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Author:

by Iryna Marchuk

Lead Writer/Blogs Manager at airSlate

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