If you received dividends from a corporation in which you owned stock, they will generally be reported to you on a copy of IRS Form 1099-DIV. The ordinary dividends you received are shown in Box 1 on the form. However, you must report all dividends you receive even if you don't receive the 1099-DIV, for example, if you took some distributions from your small C corporation business that should be treated as dividends, not salary.

You'll also receive a Form 1099-DIV from mutual funds or real estate investment trusts (REITs) that pay dividends during the year. If the total amount of all ordinary dividends you received for 2007 from all sources is $1,500 or less, you don't have to itemize your dividends on Schedule B of Form 1040 or Schedule 1 of Form 1040A. If they totaled more than $1,500, you must complete Part II of the Schedule B or Schedule 1.

Planning Tools You can download Schedule 1 and Schedule B to aid in your financial planning.

An exception to the $1,500 dollar rule applies if you received some dividends as a nominee (that is, some dividends were reported as income to you on a 1099-DIV form but they really belonged to another taxpayer who is not your spouse, perhaps because you were joint owners of the account). In that case, you must complete Part II even if total dividends were less than $1,500; show your total dividends received, and then subtract the amounts you reported to the nominees on another 1099-DIV. The net result will be the total taxable dividends.

If you did receive dividends as a nominee, you'll have to send a 1099-DIV to the actual owner(s) of the dividends by January 31, plus a copy to the IRS along with Form 1096 by February 28. If you need to file these forms, you must use official forms printed with special, machine-readable ink - you can't use paper forms that you downloaded from the Internet and printed from your home computer.

Call the IRS at 1-800-TAX-FORM and ask them to send you copies of the official forms.

• What are dividends? The IRS draws the line between dividends and interest in sometimes unexpected ways.
• Nontaxable distributions are sometimes made by investment accounts, and you'll want to avoid reporting them as dividends.

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