Welcome to the Tax Center — The Place for Tax Questions and Answers
Browse our collection of articles about important tax-planning subjects.Taxes are an important consideration for mutual fund investing. Learn about the different ways a mutual fund can generate income for you if you hold shares in a non-tax-qualified account.
- When will I receive my tax forms?
- 1099-B, 1099-DIV, 1099-R, and 1099-Q tax forms are mailed by the end of January. Form 5498-ESA is mailed in April. Form 5498 is mailed in May.
- Why did I receive a 1099 form?
- IRS Form 1099-R reports distributions from a 401(k) or a traditional, Roth, SEP, or SIMPLE IRA. You will only receive this form if there was a distribution.
- IRS Form 1099-Q reports distributions from a qualified tuition program under Section 529, or a Coverdell ESA.
- IRS Form 1099-DIV reports taxable dividends and capital gains of $10 or more paid to the shareowner, whether paid in cash or reinvested. It also reports tax exempt interest dividends and private activity bond interest paid by the Municipal Bond Fund.
- IRS Form 1099-B reports redemptions and exchanges from a non-tax qualified account.
- What is a capital gains distribution?
- Capital gains distributions are payments (usually annually) to mutual fund shareholders of long-term capital gains the fund has realized on the sale of portfolio securities.
- How do I get a copy of my year-end investor statement or tax form?
- Login to your account online or contact your Registered State Farm Agent.
- When is the deadline to do a conversion for a given tax year?
- December 31st of that year.
- When is the deadline to perform a recharacterization of IRA contributions?
- October 15th of the year following the year for which the contribution was originally made.
- What happens if I contribute too much to my IRA?
- The total amount that can be contributed to IRAs in one year is called the maximum allowable contribution. For 2023, it is either $6,500 ($7,500 if you are 50 or older) or 100 percent of your earned income, whichever is less. For 2024, it is either $7,000 ($8,000 if you are 50 or older) or 100 percent of your earned income, whichever is less. If, in one year, you contribute more than what is allowed, the difference between the amount contributed and the maximum allowable contribution may be subject to a six percent tax penalty. If you contribute too much to your IRA, you can correct this by removing some of your contributions and related earnings to avoid the tax penalty. These corrections must be made on or before October 15 of the year following the year for which the contribution is made.
- Why did I receive my form 5498 in May? I have already filed my taxes. Now what do I do?
- IRS Form 5498 is for recordkeeping purposes only and is not required to be sent to the IRS with your income tax return. A record of the information on the 5498 is sent to the IRS by State Farm™. The 5498 reports contributions made to tax-qualified retirement accounts including rollovers, conversion contributions and recharacterization contributions. Since contributions can be made up until the tax filing date, this form is not sent until the end of May, as required by law.
- Why did I not receive a 1099-DIV for my IRA?
- A 1099-DIV is not issued for an IRA since the account is a tax-qualified vehicle.
- If I reinvest my dividend and capital gain distributions, do I still have to pay taxes on these distributions during the current tax year?
- Yes. Dividend and capital gain distributions are taxable if the distributions are taken in cash or reinvested in additional fund shares in a non-tax-qualified account.
- Why is an exchange taxable if I didn't receive any cash proceeds from the transaction?
- When an exchange between funds is performed in a non-tax-qualified account, shares are redeemed from one fund and the proceeds are used to purchase shares of another fund. For tax purposes, the IRS treats the redemption side of an exchange as though it was a cash redemption. The shareowner is subject to tax on any resulting capital gain.
- What if I perform a redemption or exchange that results in a capital loss?
- Any capital gains you incur may be offset by capital losses you incur from investment activities. Your net capital gain or loss will be calculated on Schedule D of your federal income tax return. The amount of your capital gain or loss will be determined by the cost basis of the shares you sold.
- Where can I find my cost basis information?
- If available, the cost basis information can be found on your Form 1099-B.
Prepare Your Taxes
To help you prepare your taxes, review the information below specific to your State Farm Mutual Funds®.Here you'll find the scheduled mailing dates for the different tax forms. Our tax information booklets will be mailed mid- to late- February.
Before investing in a 529 plan, consider the plans investment objectives, risks, charges, and expenses. Contact the plan issuer for an official statement containing this and other information. Read it carefully.An investor should consider, before investing, whether the investor’s or designated beneficiary’s home state offers any state tax or other benefits that are only available for investments in such state’s qualified tuition program.
Securities distributed by State Farm® VP Management Corp.Neither State Farm® nor its agents provide tax or legal advice. State Farm (including State Farm Mutual Automobile Insurance Company and its subsidiaries and affiliates) is not responsible for, and does not endorse or approve, either implicitly or explicitly, the content of any third party sites hyperlinked from this page. State Farm has no discretion to alter, update, or control the content on the hyperlinked, third party site. Access to third party sites is at the user's own risk, is being provided for informational purposes only and is not a solicitation to buy or sell any of the products which may be referenced on such third party sites.
Securities are not FDIC insured, are not bank guaranteed and are subject to investment risk, including possible loss of principal.AP2023/09/0914