Retirement Accounts: If you withdrew funds from your retirement, pension or annuity accounts in 2020, or received account distributions, you will be receiving Form 1099-R. If you made Qualified Charitable Distributions (QCDs), or gifts made directly to qualified charities, they will also be included in the 1099-R totals. Make sure you alert your tax preparer to any QCDS made from your account so they are reported correctly. As a reminder, qualifying gifts made directly to charity from your retirement accounts are reported on your return but will not be included in your taxable income.
Form 1099: Form 1099 reports income, dividends, gains and losses, and other items. A first batch of Form 1099s will be mailed out from your custodian in late January or early February. However, most people will not receive their Form 1099 until mid-February. Late or corrected 1099s often happen when companies and funds reclassify income. It’s inconvenient but often unavoidable. Don’t forget that today’s 1099s are complex, and require income, gains and losses to be reported into many separate categories. As companies close their books after year-end, income and gains can get moved from one category or quarter to another, changing your Form 1099 totals. If you own securities that tend to generate corrected 1099s, consider holding off on that final return until closer to your filing deadline. Your tax professional can advise you.
Extra Copies of Tax Reports: As a convenience, we’re happy to send courtesy copies of your tax forms directly to your tax preparer. Just give us a call and we’ll make the arrangements.
IRA and Other Contributions: Don’t forget that you can contribute to your 2020 Roth or Traditional IRA up to Thursday, April 15, 2021 which is the date your individual 2020 tax return is due (while your return may be extended, your Roth or IRA contributions cannot). You can still contribute to several other types of workplace retirement accounts even after that date, so be sure to ask us for details. Retirement plan contributions can provide you with valuable tax deductions and help trim that final tax bill.
Check out our previous article “What’s Behind The Tidal Wave Of Tax Form Corrections?“