Is there a law regarding when 1099's are due?

[T-Minus]

It’s amazing to me that the entire market (including various funds) can post closing prices shortly after the market closes (within a day), while brokerages require a MONTH AND A HALF to compile tax data. I just don’t understand this.

 

[RonBoyd]

It’s amazing to me that the entire market (including various funds) can post closing prices shortly after the market closes (within a day), while brokerages require a MONTH AND A HALF to compile tax data. I just don’t understand this.

This is not a big deal to those of us that estimate our tax payments such that April 15th is the only important date. I haven't had a refund in many, many years... always owing just slightly below the "penalty" line.

 

[MRG]

It’s amazing to me that the entire market (including various funds) can post closing prices shortly after the market closes (within a day), while brokerages require a MONTH AND A HALF to compile tax data. I just don’t understand this.

The mechanics of pricing a portfolio are the same every day, year after year. Not true with tax reporting. Even if no tax laws change the IRS loves to change the reporting rules, even arbitrarily moving fields around! There's an old diddy that applies:

99 bugs in the production code
99 bugs in the code
Take one down and pass it around
117 bugs in the code
117 bugs in the code.......

Thanks anonymous Redditor.

 

[homestead]

It’s amazing to me that the entire market (including various funds) can post closing prices shortly after the market closes (within a day), while brokerages require a MONTH AND A HALF to compile tax data. I just don’t understand this.

I suspect the daily processes are automated and the yearly tax data is more of a manual process for them to compile.

 

[Cobra9777]

Fidelity says our consolidated 1099 will be available Feb 15, with delays because they are waiting for information from Schwab and Vanguard about some REIT and international ETFs in our taxable brokerage account.

I'm certainly in no hurry to file. We owe a huge amount on April 15 because 2019 was the first year of very large Roth conversions, to the top of the 22% bracket. Our quarterly estimated taxes were the minimum safe harbor requirements. So we still owe a LOT of money on April 15.

But our return is already essentially complete. The only unknown at this point is the exact amount of foreign tax credit and Section 199A dividends. Those are small in the grand scheme of things and easy to estimate from prior years. So the return is ~99% complete.

 

[MRG]

It’s amazing to me that the entire market (including various funds) can post closing prices shortly after the market closes (within a day), while brokerages require a MONTH AND A HALF to compile tax data. I just don’t understand this.

Look at Vanguard with thirty million investors. Each of them has an account, many have multiple accounts, some accounts are opened during the year and sometimes closed. I've heard five used for the average number of accounts per investor. So many 150 million opportunities to screw up. But the problem grows for each of these 150 million reporting opportunities.

Each account holds zero to many fund positions. Some investors open and close fund positions many times during the year. During accumulation investors put in a variety of contributions, conversely they can also make periodic or adhoc withdrawals.

Now remember the fund is just one to many equity or bond holdings, in our example. I was just looking at a holding and it had ~1000 positions and ~20% turnover in the positions. Of course these were all bought and sold at different times during the year, perhaps in increments. Is the gain long or short term? Do funds get to write off losses? Probably so. In any case the programs need to enforce all the appropriate accounting rules.

Matching this up with the various investor holdings in the fund can get challenging. Along the same lines individual equity/bond positions the fund owns make distributions into the fund. Actually any corporate action to any equity may impact the fund. These all have to be accounted for. Fees have to be accounted for and debited at the appropriate time. Don't forget about the complexities foreign equities, and real estate add.

Then the thing has to be formatted and possibly printed. Only ~150 million statements for 30 million investors with many millions of combinations of calculations that have only been just reported on for the first time. All with recently modified software.

What could possibly go wrong?

 

[RobbieB]

There is no penalty for getting daily values wrong. Tax info, reported to IRS, not so much.

 

[audreyh1]

Last year we waited forever for Fidelity to publish the foreign % ownership details for their funds. I think it was close to the end of March. We need that to complete form 1116 so that we can get the foreign tax credit.

 

[JoeWras]

There is no penalty for getting daily values wrong. Tax info, reported to IRS, not so much.

My experience with E*Trade was that as long as they amended them, the IRS was OK, even in late April past filing deadline.

Now, I'm no longer an E*Trade customer precisely because of excessive 1099 amendments (3 in one year one time). I'm sure I'm not alone. A person having to file amended taxes because of brokerage screw ups is not a good way to keep that person as a customer.

They're going to wait to get it right. I've never had an amended 1099 from Vanguard.

 

[londo]

FWIW, my E*Trade 1099 showed up today, 5 days ahead of schedule. It doesn't have anything on it that I haven't kept my own records for, so I'll compare it to my info. If everything matches I don't see any need to wait for a possible future amended 1099.

 

[RonBoyd]

FWIW, my E*Trade 1099 showed up today, ...

As did ours.

 

[JoeWras]

FWIW, my E*Trade 1099 showed up today, 5 days ahead of schedule. It doesn't have anything on it that I haven't kept my own records for, so I'll compare it to my info. If everything matches I don't see any need to wait for a possible future amended 1099.

I remembered the fund that E*Trade had issues with. "Permanent Portfolio". (No, I do not have it anymore.)

First of all, years have passed since my troubles and E*Trade has probably gotten their act together since then.

Second, if you don't have that fund or family, you should be OK. Or, E*Trade/PP have worked out their communication issues.

 

[pb4uski]

My husband's Vanguard account was converted to brokerage in 2019. This is the email I received after I downloaded one set of 1099s for his account, one for the brokerage, one for his RMD withdrawal.

A lot will depend on when you did the conversion... if you did the conversion before any taxable events like receipt of dividends or trades in a taxable account or withdrawals in a tax-deferred account... then you'll only get 1099s on the brokerage account. Or the inverse if the conversion was done near the end of the year.

IOW, if there is nothing to report then there is no 1099.

 

[RonBoyd]

First of all, years have passed since my troubles and E*Trade has probably gotten their act together since then.

I am unfamiliar with E*Trade's past (this is my 2nd year) but they do offer this explanation currently:

How do I know if I will receive an amended Form 1099?

If you hold a mutual fund, ETF, real estate investment trust (REIT), WHFIT, or regulated investment company (RIC), you may receive one or more amended Forms 1099 because those types of securities may reclassify payments made in 2019 or 2020. For example, a 2019 payment that was identified as an ordinary dividend may be reclassified in 2020 as a capital gain or nontaxable return of capital, prompting an amended Form 1099.

After initial Forms 1099 are generated, amended forms are typically delivered every two weeks starting in March. Later in the year, amended forms will be produced once a month, as required. If you signed up for electronic document delivery and will receive an amended tax form, we will notify you promptly
by email.

For more information, visit the Tax Center at etrade.com/tax. There you’ll find:

• Electronic copies of your tax documents
• Frequently asked questions about tax forms, tax reporting, and cost basis
• Access to our Cost Basis Resource Center, which provides tools and information to help you navigate cost basis rules

 

[JoeWras]

Wow, you could get an amended form once per month. Until when, December?

In all seriousness, I now have all my REIT activity in retirement (IRA) accounts to help limit this kind of 1099 amendment madness.

 

[cathy63]

Wow, you could get an amended form once per month. Until when, December?

In all seriousness, I now have all my REIT activity in retirement (IRA) accounts to help limit this kind of 1099 amendment madness.

We had a corrected 1099 in August one year! We did not bother to file an amended return as I estimated that we would end up owing about $5 in additional tax, and the IRS has never inquired about it. If they do, we'll pay up, but I figure they have bigger fish to fry.

The really late correction was on REM, which we no longer own. Currently we're waiting on corrections for VNQ, but they usually come out in late Feb or early Mar.

 

[ERD50]

My experience with E*Trade was that as long as they amended them, the IRS was OK, even in late April past filing deadline.

Now, I'm no longer an E*Trade customer precisely because of excessive 1099 amendments (3 in one year one time). I'm sure I'm not alone. A person having to file amended taxes because of brokerage screw ups is not a good way to keep that person as a customer.

They're going to wait to get it right. I've never had an amended 1099 from Vanguard.

Been with E*Trade since 2006. I don't recall this being a big problem, and as far as I can find with a search, 2015 was the only year I got a corrected 1099 from them.

Maybe depends on what the underlying investments are? Maybe E*Trade got bad info from the investments themselves?

(ETA - cross posted with a later reply):

"I remembered the fund that E*Trade had issues with. "Permanent Portfolio". (No, I do not have it anymore.)"

Well, that was likely the issue, not E*Trade. Not having it anymore was likely the solution, not moving from E*Trade.


-ERD50

 

[JoeWras]

Well, that was likely the issue, not E*Trade. Not having it anymore was likely the solution, not moving from E*Trade.

Mostly agree, however, E*Trade seemed to chronically slow on communications to me, and perhaps with the PP people. It just went on so slowly.

But that was then. Before they had good email and texting, etc. Hopefully things have improved a lot.

I don't want to completely bash E*Trade. Let me end with a positive spin. They were waaaaay ahead of the curve on security. I got an RSA code pendant way back around 2000. AFAIK, you can still simply request one and they send it to you for no charge. It is solid 2FA.

 

[davebarnes]

My FIDO 1099R has been delayed to 15 Feb. They say it's because of my international index fund. Whatever that means.

I got mine at 1 minute past midnight today. The 15th of February.
Ask me how I know. https://www.early-retirement.org/forums/f29/blow-that-dough-2019-a-95591-9.html#post2368131

 

[ER Eddie]

My Fidelity forms were available this morning.

 

[scrabbler1]

My (snake-bit) friend's Fido 1099 form became available today, after it got delayed for 3 weeks. I can now do his taxes.

 

[Jerry1]

eTrade says to expect them on Feb 18th. I suspect that's because it's the first business day after the 14th this year. 15th is a Saturday and Monday 17th is Presidents' Day.

Given that mine have not showed up yet (online), I suspect this is the most likely case - 2/18, first business day after the 14th. Just a bit irritating given that the home page on RJ's site says they'll be ready on the 15th. I guess they didn't have anyone capable of looking at the calendar when they programmed the web page.

 

[lucky penny]

My brokerage form showed up on ETrade yesterday.

 

[Splash]

Just got an email from Vanguard that my 1099B is now available for my brokerage account.

 

[Jeb-NY]

Different source of a 1099, any ideas.

I'm trying to do my Mother's taxes which are very simple but she cashed in a $10,000 Savings Bond bought in the early 90s for $5,000 and got around $18,500 back. Was told that a 1099 would be sent. I assume it is the government that has to issue it but so far I have not seen anything.

Is there a process for requesting a replacement if it doesn't show up soon?