Greetings,
Clients of DGWA will see their 2008 tax-year information packages mailed by Mid-February.
A Change in 2008 Tax Information Reporting!
A new law, enacted last fall, changed the deadline from Jan. 31 to Feb. 15
Employees: Your 1099’s may be arriving later this year
Employers: You may have more time to send out your 1099’s.
To avoid confusion caused by revised 1099s due to distribution reclassifications, most custodians will be mailing 2008 Tax Year 1099s by February 15 rather than January 31 as in previous years. Please be advised. Consult with your tax advisor on this matter if needed as most are aware of this change.
Genworth Financial Trust Company (GFTC) will mail 1099 Tax Packages on or before February 15th 2009 for the 2008 tax year. Additionally, this year GFTC may mail clients a revised 1099 Tax Package for 2008 in mid‐March if clients hold investments in a mutual fund, regulated investment company (RIC), foreign security or any other stock that makes a late dividend reclassification. Read below for additional details
Since the Jobs and Growth Tax Act was implemented in 2003, timely reporting of reclassified information has been a challenge for many custodians and clients due to the late release of revised data from the issuing institutions. Clients who hold investment in a mutual fund, regulated investment company (RIC), foreign security or any other stock that makes a late dividend change announcement are subject to receive revised tax packages as a result of these late announcements.
This year, GFTC, similar to other custodians on the GFWM platform, has decided to extend the January 31st 1099 mailing deadline to minimize the number of potential revised tax packages that may be issued. Revised 1099s will be sent on March 15th to clients that have investments with one or more late reclassification announcements from the issuing institution. The Revised 1099s will clearly indicate the original and revised amounts on the Summary Page so the client will be able to identify the change quickly and easily. To avoid confusion, clients will not receive a Schedule D in their revised tax packages, since that information will not change.
Information direct from the Internal Revenue Service:
WASHINGTON ― Many investors will receive their year-end tax statements later than in past years, but these forms are likely to be more accurate, according to the Internal Revenue Service.
http://www.irs.gov/newsroom/article/0,,id=203200,00.html
A new law, enacted last fall, changed the deadline from Jan. 31 to Feb. 15,
when brokers, including brokerage firms, mutual fund companies and barter
exchanges, must furnish year-end Forms 1099-B to their customers. Where a
broker furnishes these forms by mail, this means that the forms must be
mailed, not received by that date.
Because Feb. 15 falls on Sunday in 2009, and Monday, Feb. 16 is a federal
holiday, the deadline is Feb. 17 this year. In addition, the IRS said
earlier this month that for calendar-year 2008 reporting, the Feb. 17
deadline also applies to other tax information that brokers report to their
customers, including such items as interest and dividends, on a combined
year-end statement.
This change is designed to make it easier for brokers to provide investors
with accurate year-end statements on stock sales and other transactions.
Inaccurate year-end statements that have to be corrected later often force
investors to file amended individual returns.
In its 2006 annual report, the Information Returns Program Advisory
Committee (IRPAC) recommended changing this deadline from Jan. 31 to Feb.
15. The report noted that, “Form 1099 reporting has become very complex over
recent years. As a result, many broker dealers are currently experiencing
20% amended Forms 1099. There is insufficient time to make the necessary
changes in January, verify the data, print the forms and mail them by Jan.
31.” IRPAC is a federal advisory committee that advises the IRS on issues
related to information returns, such as Forms 1099.
The long-standing Jan. 31 deadline for providing other year-end forms
remains unchanged. However, because Jan. 31 falls on Saturday, employers,
banks and other businesses have until Monday, Feb. 2 to mail or otherwise
make available various 2008 year-end tax statements. This includes forms in
the W-2, 1098 and 1099 series.
Taxpayers can make the tax-filing process faster and easier and often avoid
follow-up correspondence with the IRS by carefully reviewing all year-end
statements. Make sure all social security numbers are correct, check income
and withholding amounts and contact the issuer promptly, if any mistakes are
found.
Related Item: Notice 2009-11, Brokers May Furnish Certain Composite Annual
Tax Reporting Statements by February 17, 2009
Please contact us if you have any questions during the Tax Reporting season.
Regards,
David Gratke
