Friday, January 27, 2017

Waiting for 1099s to Come In

Like many people, I am waiting for the last of my 1099 forms from banks and brokerages for tax year 2016. Together with these 1099s and my W-2 form, I have should all the data that I need to start on my tax returns.

Historically, these 1099 forms were sent out by January 31st. For investors, however, there are certain items that will delay your forms to at least February 15th. The usual suspects are mutual funds (especially foreign funds), Exchange Traded Funds (ETFs), tax-free bonds, and dividend paying stocks. For mutual funds, there are four categories of distributions: long-term capital gains, short-term capital gains, dividends, and non-qualified dividends. ETFs will sometimes declare a distribution in December, but not pay you until January. Unfortunately, you need to pay taxes on these funds in your prior year's taxes. Sometimes, foreign mutual funds need to calculate the foreign taxes paid by the fund. This calculation often takes a while for the fund to figure out. Foreign taxes paid can be taken as a credit on your U.S. taxes.

These are just a few of the reasons why you may still be waiting for your 1099 forms well into February.

Disclaimer: PF Stock does not provide tax advice. I encourages readers to consult with a tax adviser if they have specific questions about 1099 forms or filing their taxes.



Super Saver said...

So far I've only received a bank 1099, my daughter's brokerage 1099, and the tax refund 1099. Still haven't received our brokerage 1099s. I guess they are being held back for late info.

pfstock said...

Thanks for the comment. I want to ask what your daughter is investing in? Is she a teenager now? My older daughter has a regular bank account. But, it is hard to encourage kids to save these days. I had to admit that at the current interest rate, it will take nearly 7000 years for her money to double.

Super Saver said...

In one account is one legacy stock, from an inheritance, and a couple of additions, Apple and Under Armour. Apple is doing well, Under Armour is doing badly. Also, there is a little bit of a Vanguard total market ETF. I'm thinking of being more aggressive and adding a couple more stocks that have high growth potential, but will be higher risk. I haven't decided which ones yet.

In her savings account, which we started for her, is all CDs to take advantage of no income tax for the first $900 of interest for dependent children.