Please note: We are not a tax advisory firm and do not give tax advice. However, we have gathered some important information that may help you in your tax preparation. If you have additional questions, please speak with your tax advisor. If you do not have a tax advisor, we are happy to give you a referral.
It’s officially February. Personal and business tax deadlines are just around the corner, with some deadlines already passed. This tax season, your mailbox or inbox may fill up with various tax forms. Below is our quick guide to these forms.
- 1099- B: This form reports capital gains and losses. A capital gain/loss is the difference in value that the investment realizes when it is sold. You would receive a 1099-B if you sold monies from your individual, joint or trust account anytime throughout the tax year. If you sold monies from your taxable account to fund a ROTH IRA or Traditional IRA contribution, you will also receive this form.
- 1099 – DIV: You may also have received dividend income and capital gains distributions. If so, you can be expecting form 1099 – DIV. 1099-DIVs show all income that the investments pay out. If the investments that you hold in your taxable account pay out any type of distribution, you will receive this form. *Please note that you may be reinvesting these types of distributions and may not have directly received these amounts; however, they are still taxable.
- 1099 – INT: This form reports interest income for bonds or cash investments if your investment pays over $10 of interest throughout the year.
Expect this form mid-February.
- 1099 – R: Distributions from tax-qualified accounts will generate this form. These would include distributions from your IRA, Roth IRA, 401k or 403b plan. If you took a distribution, the 1099-R will outline the gross distribution taken and any federal or state taxes you had withheld. If you rolled monies over directly to the new custodian, your 1099-R will reflect a taxable portion as $0 and include the Code “G” = non-taxable rollover.
Expect this form mid to late January.
- 1099 – MISC: This is the most common tax form used to submit information for income paid to independent contractors.
- 1099 – Q: This form reports distributions from College Savings 529 Plans & Education Savings Accounts (
- Form 5498: The issuer or trustee of this form is required to file this form with the IRS – not you. It outlines the contributions made to a tax-qualified account, such
as :IRAs, Roth IRAs, SEP IRAs and SIMPLE IRAs. You will receive this form for your records only and do not need it to prepare your taxes.
Expect this form late April to mid-May.
- Form 5498 – ESA: Have you contributed to a Coverdell Education Savings Account? Then you’ll receive a 5498–ESA form. This form details contributions to Education Savings Accounts (
ESAs). However, this form is primarily for your records and you will not need it to file your taxes. The issuer or trustee is required to file this form with the IRS – not you.
Expect this form late April to mid-May.
TIPS FOR OUR CLIENTS
- You can also access the Tax Calendar (found under ‘Resources’) on our website to see important tax dates. As always, if you have any questions please contact our office at 317-882-7675.
- You will receive your tax statements in the mail from TD Ameritrade. However, you can also access your tax statements online by going to www.advisorclient.com
- Please be aware that TD Ameritrade sends consolidated 1099 statements that will include all investment information for your taxable accounts. These will include the 1099-B, 1099- DIV, 1099- INT and 1099 – MISC if this applies to your individual situation.
- Did you know that you can have Financial Plans & Strategies increase your federal and/or state tax withholding when you take distributions from your qualified retirement accounts? This may cover or reduce the amount due at tax time.
- Also, under new tax laws, we can change any existing withholding options to accommodate your individual situation.
*Financial Plans & Strategies does not receive any compensation for tax advisor referrals.