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Simple And Important Tax Filing Considerations

April 01, 2022
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By this time you should have received your tax documents. 1099s for your investment accounts should have been received through the mail or posted to your online accounts. I’d like to discuss how to determine if you’re missing any, along with a few other helpful tips.

First, the 1099-Rs on retirement accounts should have been received no later than March 15th. You will only receive a 1099-R if you took an IRA distribution. For those who have used their IRA to make charitable gifts in the form of QCDs, your 1099-R will NOT reflect this, which is why you should keep a list of gifts you made from your IRA so either you or your tax preparer can properly note this on your tax return.

Second, 1099s on non-retirement accounts should have been received for any account that realized gains, received interest or dividend, or received capital gains. Reporting on these accounts can sometimes be delayed if you hold complex securities, but if you have not received your documents by now, you should reach out to the financial institution.

A Tip to Save Time

For those of you who file your taxes with tax preparation software like Turbo Tax or H&R Block, I have a tip that can save you time. You can actually import your tax documents directly into the software. Just tell the software you’d like to import from your bank or brokerage account.

If you’re using Turbo Tax or H&R Block, select the financial institution and then enter your credentials. I highly recommend you login to your online access BEFORE you do this for two reasons: (1) you want to make sure your user ID and password work and your account is active, and (2) you want to make sure your tax documents are available and finalized and are not in draft form. If you work with a non-custodian investment advisor, you may have to enter the name of the custodian to find your account.

One Last Thing…

When reviewing and entering your tax document information into your tax return, the 1099 for non-retirement accounts have a summary page that contains several 1099s, like the 1099-DIV and 1099-INT.

However, the 1099-B summary of realized gains and losses on sells—that’s the box in the upper left-hand corner—might not actually have all of the information you need. So if you are filing your tax return yourself, you should always flip past the summary page and look at the detail of your sells.

The detail of your sells will be broken down into three sections: short-term transactions, listing everything you bought and sold within 12 months, and two long-term transaction sections, detailing everything you held for 12 months or more before selling.

There are two reasons why I am pointing this out for you:

  1. The summary page often lumps short and long-term transactions together and you’ll need to enter them separately on your tax return.
  2. The cost basis line on the summary may not include your entire cost basis.

If you use a professional tax preparer they will know this. If you are doing your own return take care to use the detailed 1099-B that follows the summary page.

Tax planning is a big part of The Meredith Group’s comprehensive planning approach. If you don’t work with a financial advisor and realize your investments have created significant taxable income, then you should reach out to our office and learn more about our MASTERPLAN® approach.

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