-Over the past couple of years, many brokerage companies send amended 1099 Form often after their clients have already prepared their tax returns based on the first 1099s.. Many investors receive as many as three amendments, with the latest ones being received well after the April 15 tax deadline.
MAY GET WORSE THIS YEAR
It will probably be worse this year since tax-exempt interest has to be reported on Forms 1099-INT and many brokers will be late adapting to this new requirement.
NOT JUST ONE OR TWO BROKERS
The problem is not with just one or two brokerage firms, but, I’ve been told that it is almost universal.
CAN’T MEET APRIL 15 DEADLINE
If you get amended 1099s, meeting the April 15 filing deadline may not be a realistic goal. But if you file late, you could be penalized for both late filing and late payment.
YOU CAN FILE AN EXTENSION REQUEST
You could calculate your tax based on the initial set of 1099s you receive, but instead of filing the return, you could request an extension with Form 4868 and send a payment with the extension request if you expect to owe. This would give you until October 15 to file.
IF YOU DON'T SUBMIT AN EXTENSION REQUEST AND FILE LATE
Even if you file late and don’t send the extension request, there is no penalty or interest if you do not owe any tax. But send in the extension request anyway in case you are are wrong and possibly do owe something--it only costs 39¢ to mail it.
YOU CAN FILE AN AMENDED RETURN
If you are substantially overpaid and want the refund, then you might file before April 15, then submit an amended return, Form 1040X, if late 1099s indicate changes are necessary.
PAYING MOST OF YOUR TAX NEAR YEAR-END COULD TRIGGER PENALTIES
Unless you indicate otherwise by filing Form 2210, the IRS assumes your income was received equally throughout the year. If your payments are skewed toward the end of the year, you could be penalized even if you paid a sufficient amount in total. However, if you request an extension and pay MORE than you owe, the IRS may send the refund without checking to see if you paid in equal installments.
YOU CAN PAY YOUR TAXES ONLINE
If you sign up for the Electronic Federal Tax Payment System (EFTPS), you can make your tax payments using the internet. To look into that option, go to http://www.eftps.gov/
LINKS and References – go to
This information is not intended to be advice to the recipient. In compliance with Treasury Department Circular 230, unless stated to the contrary, any Federal Tax advice contained in this Blog was not intended or written to be used and cannot be used for the purposes of avoiding penalties.