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REFRESH//Tax-Filing Myth Buster: When 1099s Are Due for Brokerage Accounts

Learn brokerage account tax filing rules, including when consolidated 1099s are due, and the deadline for the 2019 tax year.

Key Takeaways

  • Brokerage account 1099s should be postmarked by February 15, 2020
  • The extra time helps your broker minimize the number of corrections it must issue 
  • Clients can find help at the TD Ameritrade Tax Center

Tax filing—fact or myth? Your brokerage account’s 1099 form for 2019 must be in the mail by January 31, 2020.

Myth.

Say what? That’s right, a consolidated 1099 form should be postmarked by February 15, according to the Internal Revenue Service (IRS). Actually, that's been the case for a while now—the 1099 mailing deadline changed starting with the 2008 tax year.

Previously, firms were required to have these forms validated and postmarked by January 31. But that’s no longer true. With the complexity involved in producing consolidated 1099s, the extended deadline gives brokerage firms more time to validate and avoid corrections required when funds reallocate their distributions or when securities are purchased in January during an open wash sale window.

At TD Ameritrade, we use a phased approach to get forms out quickly while minimizing the number of corrections. If your portfolio includes certain types of securities such as mutual funds and Real Estate Investment Trusts (REITs), which may reallocate or reclassify their distributions in January and February, your form may be issued in a later phase to attempt to avoid corrections. 

Note: This change affects 1099s that are combined with a 1099-B, a form that summarizes the proceeds (gains and losses) of stock transactions. Standalone 1099s are still held to the 1099 deadline of January 31.

What’s in the Consolidated Form 1099?

Your consolidated 1099 will contain all reportable income and transactions for the year. Depending on your account activity, yours may include any or all of the following.

1099 Type

What’s Reported

1099-BSales transactions, cover short transactions, closing options transactions, redemptions, tender offers, and mergers for cash
1099-DIVOrdinary dividends of $10 or more from U.S. and foreign corporations, capital gains distributions, mutual fund dividends, federal and foreign tax withheld, and nontaxable distributions
1099-INTInterest income of $10 or more; federal and foreign tax withheld
1099-MISCRent or royalty payments, substitute payments of $10 or more, and other income totaling $600 or more
1099-OIDOriginal issue discounts on corporate bonds, certificates of deposit (CDs), collateralized debt obligations (CDOs), and U.S. government obligations of $10 or more

Why the Wait?

New for 2019: Tax Document Alerts 

Starting with the 2019 tax year, TD Ameritrade clients can sign up for alerts via text and push notification when their tax documents are ready to view. If you’re not going to be receiving a 1099 document, there’s an alert for that as well.

Want to sign up? Log in to your account, and under the Client Services tab, select My Profile > Communication Preferences. Under Document delivery preferences, scroll down to Tax alerts and select the appropriate mobile number. Want to add or change a phone number? Go to My Profile > Personal Information > Edit

Want to receive your tax document info as push notifications? If you have the TD Ameritrade mobile app, and you have push notifications turned on, you’ll receive these alerts automatically.

Can there be a benefit to waiting another two weeks? Absolutely—a lot can happen in two weeks. For example:

  • The additional time for form validation is helpful for tax form providers (that’s your broker).
  • Fewer 1099 forms have to be corrected because of funds reallocating distributions.
  • The extension allows for tracking the purchase of a security in January during an open wash sale window, which changes the transaction reported for the tax year that just concluded.

But don’t assume that if you get one corrected form, you’re in the clear. More corrections could come. Firms are required to produce corrected forms in a timely manner, so if the funds in which you invest reallocate in September (and yes, this happens), you’ll receive a corrected tax form.

Every effort is made to send tax forms out earlier for accounts that have little chance of correction. For instance, perhaps an investor didn’t have any trades in December that would be impacted by trading activity the following January, or the securities don’t typically reallocate distributions. Still, there’s no guarantee a corrected form won’t be issued.

Take a Deep Breath

Suppose it’s February 4 and your broker indicates your tax form will be mailed out by the 15th. Rest assured, this is within the IRS 1099 deadline; the firm didn’t get an extension just to make you wait. After all, brokerages don’t like issuing corrections any more than you like receiving them.

Let Us Help

Once you’re logged in to tdameritrade.com, go to My Account > Tax Center. Check out the Tax Document Calendar for 1099 due dates and other information on forms TD Ameritrade generates.

You can also Ask Ted®. You’ll find him under the Support button along the top navigation bar. If he doesn’t know the answer to your tax question and it’s during standard business hours (Monday–Friday, 9 a.m. to 5:30 p.m. ET), use our Chat feature to speak with a Tax Services Representative.

TD Ameritrade does not provide tax advice. We suggest you consult with a tax-planning professional with regard to your personal circumstances.

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Key Takeaways

  • Brokerage account 1099s should be postmarked by February 15, 2020
  • The extra time helps your broker minimize the number of corrections it must issue 
  • Clients can find help at the TD Ameritrade Tax Center

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