Getting Organized for Tax Season

Written by Matt Benson, CFP®

We try to be proactive with our client communication and we are also blessed with a great group of people to serve so the phones here at the office are usually very manageable. Where we do notice an uptick in calls is during tax time. 

There’s a group of you, and you know who you are, that could do your own taxes blindfolded and are simply waiting for the legal documents to show up. There is another group that takes it right down to the wire. We know you are busy, and we do our best to accommodate that as well. In this article, I wanted to talk about the tax documents you should be looking out for, the timeline you should expect them in, and various methods of delivery options.

Those of you with tax qualified accounts like IRAs, Simple IRAs, and Roth IRAs may get some combination of form 1099-R and form 5498. Whether you get them or not depends on your activity in those accounts during the calendar year 2021. If you take distributions from your IRA or do a rollover, you will receive a 1099-R which shows the taxable amount taken for the year. Form 5498 reports the contribution history for those doing rollovers or making annual contributions to IRAs. If you have non-qualified accounts like Transfer on Death, Joint, or Trusts you will receive a composite 1099. This aggregate 1099 should cover dividends, interest and impacts of sales in the account - 1099-DIV, INT, and B respectively. For parents or grandparents that have Section 529 accounts remember to report contributions to your preparer as you are eligible for a state tax deduction. If there were distributions in those accounts expect to see a 1099-Q.

The date that 1099-R and 5498 will be available will be 1/21/2022. They allow for 2 weeks to print and mail so we are looking at the first week of February for delivery. The composite 1099 is set to run on 2/11/2022 so, again, end of February for the hard copy from the custodian. If you don’t want to wait for the physical delivery you can get access to these documents electronically at the custodian website. If you would like us to drop a copy into your vault in the wealth management dashboard, we can do that as well. We have relationships with a lot of your tax preparers and, with the proper authorization, can share those documents securely directly to them.

As we return to our 4/15/2022 filing deadline after two years of changing deadlines and legislation, let us make this as easy as possible for you. We appreciate being involved in this part of the planning so feel free to share your preference.

This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.