Tax time is upon us and many of you are ready to get your returns prepared. Please remember that we encourage all clients to wait until all your tax forms are available to avoid the need to file an amended tax return later.
Below is some useful information from Charles Schwab about if/when you can expect your 2024 tax documents.
Not Every Account Gets a Tax Form
Based on IRS de minimis rules for reporting income, Schwab produces forms for an account only when at least one of the following conditions are met:
- 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 your account did not include any of these activities, you will not receive a 1099 for that account.
Where Can You Find Tax Documents?
You should be able to find your tax documents in two different places.
- Schawab Alliance Website - The 1099 Dashboard (located on the Schwab Alliance Statements page) is the primary place for you to find your 1099s. Schwab will notify you by email when your 1099s have been posted.
- Hicks & Associates Wealth Management Portal - All Schwab documents (monthly statements, tax documents, etc.) are pushed over to the HAWM Client Portal. We encourage all of our clients to use our portal instead of the Schwab portal. If you do not have access to our client portal, please let any member of our team know and we will get you set up.
We believe it is a bit easier to download your tax documents from our portal as opposed to Charles Schwab's portal, but either method is fine.
1099 Timetables
Schwab produces Form 1099 Composite in three separate production runs. Most of our clients should be in the same production run, but this is out of our control.
A third production run was added for tax year 2024 to help reduce the likelihood that you may receive a corrected 1099 form. 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 28.
Tax Form Corrections
Under certain circumstances, you may receive corrected tax forms.
Receiving Updated Information From Securities Issuers.
Please be aware that the issuers of some securities may reclassify income any time after Schwab has mailed their tax forms. When Schwab receives 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. When this happens, it is out of our control. This is one reason why you 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, you won't receive a corrected 1099 for 2024 based on de minimis rules.
If you have any questions, please contact our office.
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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