Waiting…For Your Tax Forms?

The Skinny on What Form You’ll Get and When

For most people eager to get their taxes filed, February 1 has become sort of like Christmas.  The only difference being that instead of Santa Claus shimmying down the chimney with a bag of toys, a mail carrier brings little gifts in the form of W-2s, 1098s and various 1099s (who said grown-ups don’t have any fun?).  While we anxiously await the arrival of our various financial statements, it may be helpful to know that some of the forms may be delayed this year.  Take heart, it’s not necessarily bad news.

Why the change?  Last year, when the Congressional bailout was passed, a provision was added that gave mutual-fund corporations, as well as brokerage firms, additional time to distribute tax forms (especially Form 1099-B) that are used to report earnings from brokers’ transactions.  The deadline has been pushed back from the usual January 31st to February 15th.  And, to add some confusion to an already confusing situation, February 15th falls on a Sunday this year and the 16th is President’s Day, so brokers technically have until February 17th.

But wait, there’s more!  The February 17th deadline also pertains to other tax information that customers receive from their brokers.  Interests and dividends on a combined year-end statement could be affected too.

So, what’s the silver lining?  Well, the change was designed to give brokers more time to make sure the year end statements they provide their customers are accurate.  According to the IRS, up to 20% of the 1099s brokers send to their clients end up getting amended.  Usually, the clients have already filed their taxes by the time they get the amended 1099s and that means they have to amend their returns (and even with TurboTax, amending a return is no fun).  So the thinking is—give the brokers more time to compile accurate info, and returns should be more accurate (I guess you could call this trickle down taxes).  I guess we should take a few things from this.

1)    The 1099-Bs that show up later this year should be more accurate and therefore should make it easier for us to file.

2)    Not all year end forms are affected—W-2s, 1098s and other 1099s still have a Jan. 31st deadline.

3)    Stop bugging your mail carrier—he/she isn’t Santa and, just because you haven’t gotten some of your statements, doesn’t mean you’ve landed on some financial naughty list (although I’m pretty sure mail carriers do appreciate milk and cookies).