Year-end is approaching and being prepared is the best way to make this tax season your easiest yet. Below are some of the important information and tools you will need to help you get ready. As always, meeting with your financial advisor early and often will ensure your questions are answered.

Important Dates and Deadlines

During the 2019 tax season, 1099 Consolidated Statements will be mailed in four phases in order to meet all IRS deadlines, reduce errors, and reduce the need to mail a corrected 1099.

2019 Mailing Schedule

January 31: 1099-R Form Mailing First Wave of 1099 Consolidated Forms Mailing- Includes accounts with the simplest tax information and not subject to income reclassification

February 15: Second Wave of 1099 Consolidated Forms Mailing – Includes accounts holding securities that may be subject to income reclassification

February 19: Preliminary 1099 Consolidated Tax Statement- Draft Copy. Includes accounts that will not receive a final 1099 Consolidated Tax Statement until March 1 or March 15.

March 1: Third Wave of 1099 Consolidated Forms Mailing – Includes accounts holding securities that may be subject to income reclassification where investment companies did not furnish tax information to LPL Financial, the broker of record, in time for the February 15 mailing deadline.

March 15: Fourth Wave of 1099 Consolidated Forms Mailing – Includes AMBIR information and accounts where investment companies did not furnish tax information to LPL Financial, the broker of record, in time for the February 15 mailing deadline, and any accounts that hold securities that provide mortgage-backed income reporting information

April 15: IRS Tax Filing or Extension Request Deadline

October 15: IRS Extension Tax Filing Deadline

 

Why are there different mailing dates for 1099 Consolidated Statements?

Similar to other major financial firms’ standard protocols and delivery, 1099 Consolidated statements are mailed in waves as information is received from various institutions. For certain security types, final tax information from the bank, institution, or other type of issuer may be received after the standard deadline, resulting in your statement not arriving on the anticipated February date. In these cases, your 1099 tax statement will be mailed between March 1- 15, 2019.

Reclassification: What is it and what do I need to know?

Income reclassification is an annual process where security issuers change the tax characterization of distributions that were paid during the tax year. Often, the result of income reclassification is a more favorable tax treatment. The income reclassification process takes place after the end of the tax year, during the first quarter, when security issuers announce their income reclassification for the previous tax year. The income reclassification process affects income distributions you may have received during the previous tax year. The IRS requires final income reclassification to be reported to you on Form 1099.

Please note: Reclassification is an industry-wide activity. All financial industry firms receive reclassified data from the issuers.

Preliminary 1099 Consolidated Tax Statement: What is it and what do I need to know?

A preliminary 1099 Consolidated Tax Form Statement is an advanced DRAFT copy of your 1099 tax forms. The draft form should NOT be considered final and should NOT be used for the purpose of filing tax returns with the IRS or with any state or other regulatory authority. All pages of the document are for your information only and may assist you with tax preparation. A preliminary 1099 Consolidated Tax form statement will be available on Account View or through your Financial Advisor. Please be aware that these documents will not be mailed.

If you have any questions or are needing some year-end planning before filing this year contact our offices.