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I am an American disabled person and my only income is from disability payments, which are well below the poverty level. As such, I do not file any tax returns.

Many years ago, I bought about 3 shares of FDX stock as part of a promotion. It is the only stock I own. Since purchasing that stock, I have never bought or sold any equities.

Given that the interest/divendends from that stock have always been below $10/year, I have never received any tax forms for that stock, and therefore I have never had to file a tax return.

But as the value of that stock has increased, and dividends have been reinvested in the stock (I now own 3.1 shares), I am concerned that my interest/dividends might exceed $10/year. This will generate a Form 1099 of some sort, and force me to file a tax return.

Filing a tax return would be very stressful for me, and my illness is exacerbated by stress.

Is there anything I can do (legally), such as give away some or all of my stock, so that I won't have to file a tax return?

Ginger
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2 Answers2

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The generation of a Form 1099 does not, by itself, automatically require you to file a tax return.

The filing requirements are based on your total income. Let’s pretend that last year you received $9 in dividends, did not receive a 1099, and were under the threshold of total income that would require you to file a tax return. If, this year, you receive $11 in dividends, you may get a 1099, but your total income has only gone up $2. It is unlikely that this amount would push you over the top of the filing requirement threshold by itself.

If you are over the filing requirement income threshold, giving money away will not remove your filing requirement.

You can sell your stock. This would eliminate the dividend income in future years. However, that would result in a capital gain in the year you sell it, and if the capital gain is large enough, it may put you over the filing requirement threshold.

If you give your stock away, either to a charity or to a friend, you would avoid any capital gain and, of course, eliminate the dividend income in the future. The amount you are talking about is well under the reporting requirements for the gift tax. This may be the best option if you are absolutely insistent on avoiding a tax return and think that you are close to the filing requirement.

However, I would encourage you not to be so worried about filing a tax return. At your income level, you will probably owe very little tax (if any) even with the capital gain resulting from a sale. See if you can find someone (a friend, a family member, a member of your church, etc.) that can help you sell the stock and fill out your tax return, if required.

Ben Miller
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Getting a 1099 does not magically make you need to file a tax return!

Your disability income most likely is reported to the IRS as well in the form of a 1099 or w2, so getting a second one really does not change anything.

It is based on your income overall. Here the IRS details the income levels that determine whether you must file taxes:

https://www.irs.gov/publications/p501#en_US_2017_publink1000220687

Unless you are razor-close to the margins outlined therein, don't worry about it.

le3th4x0rbot
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