Tax time is upon us and many of you are ready to get your returns prepared. We want to remind you to wait until all your tax forms are available to avoid the need to file an amendment later. Below is some useful information from Charles Schwab about if/when you can expect your 2025 tax documents.
Not every account gets a tax form
- The account reaches $10 in dividend income.
- The account reaches $10 in interest, royalties, or original issue discount (OID) income.
- A Form 1099-B reportable transaction occurs in the account (e.g., a sell or a buy to cover).
If a client's account did not include any of these activities, they won't receive a 1099 for 2025.
Where clients can find their tax forms
The 1099 Dashboard (located on the Schwab Alliance Statements page) is the primary place clients can find their 1099s. Schwab notifies clients by email when their 1099s have been posted.
1099 Timetables
Many corrected 1099 forms are triggered because securities reclassify income or because wash sales bring deferred losses with January purchases. Per the IRS, the due date to make 1099 forms available to clients is February 15 (or the next business day). Broker-dealers can request a 30-day extension of time when they have reason to believe they will not have all the information needed in time to produce an accurate form. All original 1099 Composite forms will be sent by February 27.
Tax form corrections
Under certain circumstances, your clients may receive corrected tax forms.
You and your clients should be aware that the issuers of their securities may reclassify income any time after we have mailed their tax forms. When we receive updated information from issuers of securities after an initial tax form has been mailed, Schwab is required to send a corrected 1099 form with the revisions clearly highlighted. Clients may receive more than one corrected 1099 form.
Reaching the IRS de minimis threshold for corrections.
Schwab will send a corrected 1099 form for an account when at least one of the following conditions has been met:
- There is a change of more than $100 to an individual reportable item (except for backup tax withholding) on any tax form except for Form 1099-B.
- There is a change of more than $25 to backup tax withholding on any form.
- There is change of any amount to a covered security that was reported on Form 1099-B.
If the tax reporting adjustment did not include any of these activities, they won't receive a corrected 1099 for 2025 based on de minimis rules.
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This information is intended to be educational. Hicks & Associates Wealth Management does not provide tax or legal advice. You should consult with a qualified tax, legal or financial professional before making any decisions.
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