Taxes & Form 1099 Composite Corrections

[leftymd]

Just received my 4th correction of Chas Schwab Form 1099 Composite and of course taxes were e-filed after the 3rd correction.

Seems like a lot of corrections for Tax Year 2013. Appears that BDC's are the latest culprit.....dividends received in mid January now credited to TY 2013.

Frustrating

[LOL!]

So for next year, you are filing for an extension and then submitting your return in October 2015, right?

[Animorph]

I'm still sitting on my return, but I've only had one corrected 1099 in the past 10 years or so.

[audreyh1]

We went ahead and filed. Fidelity didn't have any corrections since 2/14. 2004 or thereabouts was the only year that we had to submit an amended return due to a late 1099 change (April 16th no less!). I think some major tax laws changed that year and caused delays with mutual funds. Still we wait until early April to file to be sure.

All done - yay!

[steelyman]

I've only been audited once, and I think it was caused by me moving between states, having lots of dinky jobs and (most importantly) having no idea what I was doing.

The guy shows up, we go over my return, then he says, "You don't have any money, do you?".

I said, "Yeah, you noticed that, huh?".

(back in the 80s)

[braumeister]

I've been audited twice, but just postal audits. In both cases, I had simply screwed up, but didn't actually underpay my taxes.

They sent a letter pointing out a mistake, I filed a corrected return, they sent another letter saying it was cool.

Since the new regulations allow the brokerages to send 1099s out much later than they used to. I haven't had a problem. I still wait until March to file, but I don't deal with any K-1s any more, either.

[MichaelB]

Quote:

Originally Posted by leftymd Just received my 4th correction of Chas Schwab Form 1099 Composite and of course taxes were e-filed after the 3rd correction. Seems like a lot of corrections for Tax Year 2013. Appears that BDC's are the latest culprit.....dividends received in mid January now credited to TY 2013. Frustrating

Compare this with the previous version. A correction may be a simple classification change that does not affect taxable income.

[jebmke]

Poster child for filing tax return just before it is due (October 15).

[JoeWras]

I'm very, very irritated right now. I just got a corrected 1099 today (dated 4/13/2014).

This is the 3rd 1099 from this firm. I waited to the last minute to file and this is my reward.

I'm just venting. In this day and age, I find this kind of thing to be ridiculous.

Question: this is going to give me $600 or so of capital gain. So I'll owe more tax. Do I have to pay a penalty on this? I mean, this is beyond my control.

So, dang, frustrating.

[LOL!]

Good rant, but why in the world did you file before October?

Oh, we got a corrected 1099-R on Saturday which would normally affect our 2012 tax return, but we planned ahead, so we don't have to do anything about it.

[GrayHare]

Poor management like that would encourage me to sell off the asset generating delayed 1099s.

[Alan]

Quote:

Originally Posted by LOL! Good rant, but why in the world did you file before October? Oh, we got a corrected 1099-R on Saturday which would normally affect our 2012 tax return, but we planned ahead, so we don't have to do anything about it.

I'm curious how you managed that. Surely you filed your 2012 taxes by October 2013? If so, why don't you have to file an amended 2012 return?

[LOL!]

@Alan, my spouse had an excess deferral to her 401(k) plan in 2012 because she switched jobs and then had a corrective distribution in 2013. The 1099-R showed up in 2014 with the wrong amount and the wrong code in Box 7. We expected that the 401(k) custodian would screw it up because they screwed up the corrective distribution in the first place. Twice. And they fulfilled our expectations. It took multiple tries to get a corrected 1099-R and we finally succeeded.

But we filed our 2012 return last October with the correct amounts assuming the 1099-R coming in 2014 would eventually get corrected, so we had put the correct amounts on the return in the first place.

Does that make sense?

[Alan]

Quote:

Originally Posted by LOL! @Alan, my spouse had an excess deferral to her 401(k) plan in 2012 because she switched jobs and then had a corrective distribution in 2013. The 1099-R showed up in 2014 with the wrong amount and the wrong code in Box 7. We expected that the 401(k) custodian would screw it up because they screwed up the corrective distribution in the first place. Twice. And they fulfilled our expectations. It took multiple tries to get a corrected 1099-R and we finally succeeded. But we filed our 2012 return last October with the correct amounts assuming the 1099-R coming in 2014 would eventually get corrected, so we had put the correct amounts on the return in the first place. Does that make sense?

Yes, just about!!

[JoeWras]

Quote:

Originally Posted by GrayHare Poor management like that would encourage me to sell off the asset generating delayed 1099s.

I am firing up my browser right now to do so. I am SO FED UP with this asset.

Yet it may be communications between the fund company and broker. Perhaps they use carrier pigeon? Or perhaps the broker missed something.

I mean, this wasn't even a recharacterization. It was a MISS of cap gains.

Got to remind myself: always put 'weird' assets in IRAs...

[pb4uski]

Did they miss the sale or misstate the basis? If they missed the sale, then you could have caught it. Unless you keep track of your own basis then it's on them.

However, if I had an asset that was habitually generating corrected 1099 forms I would take a hard look as to whether the diversification and returns it provided were worth the aggravation.

[Rustward]

Do you track your capital gains yourself, or do you just depend on getting the 1099's?

I do both and reconcile the 1099's with my own records.

[JoeWras]

It was a mutual fund that deals in wonky stuff like gold. I had very little position in it. Now I'm done. It is over.

So, I didn't have a sale, I had a "distribution". For mutual fund distributions, I rely on the 1099. I don't sit there and do a correlation between all my distributions recorded on Quicken and my 1099s.

Now for actual sales, I do all the math especially since I tend to hold a long time, and most of my holdings are before the brokers/fund companies had to keep track of basis. I would have caught that.

[SteveL]

Just another note about Schwab. I get everything from them electronically including 1099s. They always send an email EXCEPT when there is a corrected 1099. You have to go back into their site and keep checking! I am in the process of complaining about this "violation" of their agreement to send email in this situation.