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 2021! 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.
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.
Expect this form mid-January to late-February.
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.
Expect this form mid-January to late-February (there could be corrected statements generated as well depending on the reporting of the stock company)
1099–INT: This form reports interest income from investments. This form is required on interest payments of over $10 during 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 withholdings.
Expect this form mid- to late-January.
If you rolled monies over directly to the new custodian, your 1099-R will reflect the taxable portion as $0 and include the Code “G” = non-taxable rollover. While this rollover is not taxable to you, it is still tax reportable.
If you gifted all or a portion of your Required Minimum Distribution (RMD) as a non-taxable qualified charitable distribution, 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.
If you completed a Roth Conversion in 2020, you will receive a 1099-R showing the dollar amount of the conversion. This amount will be added to your gross income for 2020. Please reference the IRS Form 8606 with instructions to report your Roth Conversion.
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 (ESAs).
Expect this form mid-January to mid-February.
Form 5498: The issuer or trustee of this form is required to file this form with the IRS. 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.
If you made contributions to your IRA or Roth IRA 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.
If you completed a Roth IRA Conversion in 2020, you will receive a 5498 showing the dollar amount that moved from your IRA into your Roth IRA. 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 issuer or trustee is required to file this form with the IRS.
Expect this form late-April to mid-May.
TIPS FOR OUR CLIENTS
You can also access the Tax Calendar (found under ‘Resources/ Tax Resources’) on our website using this link https://www.finplans.com/tools/tax-resources. 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 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.
*Financial Plans & Strategies does not receive any compensation for tax advisor referrals.