As you prepare for the 2011 tax season, please consider this important information. Due to the Economic Stabilization Act of 2008 and the IRS mandated reporting of cost basis, this tax season will not be like previous ones. By being aware of these changes, you will know how best to plan and set expectations.
New mailing dates
Raymond James will adhere to the IRS's 1099 mailing deadline, which means original 2011 Composite Statement of 1099 Forms will be mailed on February 15, 2012. Please note the exceptions immediately below.
In an effort to capture correct data on original 1099s, the IRS allows us to extend the mailing date until March 15, 2012 for clients who hold particular investments or who have had specific taxable events occur. These include:
- Mutual Funds
- Real Estate Investment Trusts (REITs)
- Widely Held Fixed Investment Trusts (WHFITs)
- Original Issue Discount (OID) securities
- Gain/Loss activity
Even after delaying the 1099 statements, please be aware that adjustments to your tax forms are still possible. Raymond James is required by the IRS to produce an amended tax statement if notice of such an adjustment is received after the original 1099 has been produced. There is no cut-off or deadline for amended 1099 statements.
Due to the IRS's mandatory cost basis reporting requirement, it is expected that clients will see a significant increase in both delayed and amended 1099s for 2011.
What can you do?
Given the expected increase in both delayed and corrected 1099 tax forms for tax season 2011, you should consider talking to your tax advisor about whether it makes sense to file an extension with the IRS to give you additional time to file your tax return, particularly if you hold any of the aforementioned securities or if you have sold securities, either through a direct trade or indirectly through a corporate action or any other event during 2011.
If you receive a corrected 1099 after you have already filed your tax return, you should consult with your tax advisor about the requirements to re-file based on your individual tax circumstances.
We hope you find this additional information helpful. Please call us if you have any questions or concerns about the upcoming tax season.