Let's Talk Taxes

LET'S TALK TAXES!

Happy New Year! As we look ahead to tax season, your mailbox or inbox may fill up with various tax forms. Below is our quick guide to these forms.

1) Consolidated 1099: TDA combines the 1099-Div, 1099-INT and 1099-B into one Consolidated Statement

These forms are sent out in waves, and you should receive these by February 17^th at the latest.

1. 1099–DIV: This form shows all distributions received from your non-qualified investments during a calendar year. Please note that you may be reinvesting these distributions and may not have directly received them; however, they are still taxable.
2. 1099-B:This form reports capital gains and losses from the sale of stocks, bonds or other securities transacted through a broker.  This form is used to calculate taxes on capital gains/losses associated with these transactions in your non-qualified accounts.
3. 1099–INT: This form reports interest income from investments. This form is required on interest payments of over $10 during the year.
4. 1099–MISC: This is the most common tax form used to submit information for income paid to independent contractors.
   

2) 1099–R: Distributions from tax-qualified accounts will generate this form. These would include distributions from your IRA, Roth IRA, 401k, 403b or 401a plan. If you took a distribution, the 1099-R will outline the gross distribution taken and any federal or state taxes withholdings. This form has already been sent out and you should have access to it online at www.advisorclient.com, in your FPS Live client portal vault or be receiving it by mail soon.

Important Items to note for tax reporting:

1. If you rolled monies over directly to TD Ameritrade, your 1099-R will reflect the taxable portion as $0 and include the Code “G” which indicates that this was a rollover. While this rollover is not taxable to you, it is still tax reportable.
2. If you gifted all or a portion of your Required Minimum Distribution (RMD) as a non-taxable Qualified Charitable Distribution (QCD), please note the amount gifted is not broken down on the 1099-R. You will need to provide the amount of your RMD and provide the amount(s) gifted to your CPA or tax advisor.
3. Please note that if you did not have an RMD and made QCDs, then you will need to report these for tax purposes. This will distinguish that these distributions went to a qualified charity and are not taxable to you.
4. If you completed a Roth Conversion in 2022, you will receive a 1099-R for your IRA showing the dollar amount of the conversion. This amount will be added to your gross income for 2022. Please reference the IRS Form 8606 with instructions on how to report your Roth Conversion.

3) 1099–Q: This form reports distributions from College Savings 529 Plans & Education Savings Accounts (ESAs). Expect to receive this form mid-January to mid-February.

4) Form 5498: This form 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. Because you can make an IRA contribution for the previous tax year (2022) until the tax filing deadline, (Tuesday, April 18, 2023), you will receive this form late-April to mid-May.

1. If you made contributions to your IRA or Roth IRA for the 2022 tax year, you will receive this form. Please make your tax advisor aware of any IRA contributions so they can help you determine if these are deductible. If they are non-deductible contributions, please reference the IRS Form 8606 with instructions to report your contributions.
2. If you completed a Roth IRA Conversion in 2022, you will receive a 5498 showing the dollar amount that moved from your IRA into your Roth IRA. As outlined above, please reference the IRS Form 8606 with instructions to help report Roth IRA Conversions.

• Form 5498–ESA:  If you made contributions to a Coverdell Education Savings Account, you will 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 custodian is required to file this form with the IRS. Expect this form late-April to mid-May

Important Tips from FPS:

• Did you know that you can have Financial Plans & Strategies adjust 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. Please call, text, or email us to make changes to your current withholding percentages. (317-882-7675)
• Access your tax forms electronically:
  1. The TD Ameritrade client access site: advisorclient.com
     3. Here is an instruction sheet for setting up your TDA site: https://static.fmgsuite.com/media/documents/9aa9bdd4-f010-429b-9d8e-0add83bae1d3.pdf
  2. The Vault in your FPSLive Client Portal. The tax statements are in your TD Ameritrade Institutional folder: https://wealth.emaplan.com/ema/SignIn?ema%2fria%2ffinancialplans
     1. Here is an instruction sheet for your client portal: https://static.fmgsuite.com/media/documents/22df62be-6634-4eb4-addf-0294aa3875ac.pdf

If you need additional assistance please call, email, or text us at 317-882-7675! Thank you for the opportunity to help you!