2011 Tax Statements; Brokers delay tax statements for Investors

  • Written by David
  • March 9, 2012 at 8:41 pm
  • 0
  • Why the Delay in 2011 Tax Statements?

    Two articles below discuss changes in 2011 U.S. tax reporting law for all US Financial Institutions (custodians) and why there are delays in the receipt of these 2011 tax statements, and/or revisions to previously mailed statements.

    From USA Today: Updated 2/28/2012 8:24 PM

    Several popular online brokerages, including Charles Schwab, Raymond James, ShareBuilder, TradeKing, Wells Fargo Advisors and Zecco, asked for 30-day extensions of the Feb. 15 deadline to send out tax forms. So some investors might have to wait a full extra month.

    The delays affect tax preparers and taxpayers who will have a shorter period of time than usual to get their taxes done or must wait longer to get their refunds. Tax preparers say allowing firms to delay past the long-standing deadline is straining the system.

    •New capital gains reporting requirements. Many brokerages that still haven’t mailed out tax forms rely on Penson Financial, a large back-office brokerage services company, to process tax forms. New rules requiring brokers to track how much investors paid for securities that were sold are causing delays for many firms, Penson says. It says forms will be completed by March 15.

    •Vagaries of investment types. Some tax forms are being delayed or marked as preliminary if they contain investments that tend to make tax adjustments after Feb. 15, such as real estate investment trusts. Wells Fargo Advisors mailed most of its statements by the deadline. Some are marked as preliminary and may be corrected as late as March 15. Raymond James, too, will mail out statements to investors as late as March 15 if they own investments that tend to make adjustments.

    •Efforts to reduce corrections or amendments to tax forms. Schwab mailed out all its tax forms to clients by Feb. 21, taking extra days to reduce the number of amended statements, it says. ShareBuilder says most investors have their statements, but 20% of account holders got them as late as Feb. 27 in an effort to reduce corrected returns.

    Rules need to be changed so tax forms are again sent to taxpayers by the end of January, as used to be the case, Anspach says. Corrections should be reflected in the following year’s returns. “The deadline had been Jan. 31. That worked for decades,” he says. >more

    From Reuters: NEW YORK | Fri Mar 2, 2012 2:18pm EST

    Brokers delay 1099s, causing US investor angst

    (Reuters) – A change in the U.S. 2011 tax reporting rules that took effect this year is causing major delays in banks and brokerages delivering investors’ 1099s.

    Investors are now learning they might not receive 1099s, typically sent by February 15, until March 15. Tax returns can’t be filed without the forms. Banks and brokerages use 1099s, required by the Internal Revenue Service, to show all income, including interest and dividends, clients received from their accounts.

    The delay has caused anger and frustration among investors who face higher charges from accountants and possible penalties for late payment of taxes due. In many cases accountants are recommending that clients file for an extension from the April 17 tax filing deadline.

    Brokerage executives say the delay also means fewer corrected 1099 forms — a headache for clients — will be needed. Corrections are often a result of a scheduling oddity. The February 15 deadline for distributing brokerage 1099s is the same date securities issuers must deliver to brokerages the final figures for each client’s investment income.

    Schwab took six extra days to distribute 1099s and sent 155,000 corrected 1099s this year, down from 350,000 last year. >more


    Anybody up for the simplification of our U.S. Income Tax code? Very frustrating indeed.

    Thanks for reading.

    David Gratke.


Leave a Reply


Your email address will not be published. Required fields are marked *

  • Gratke Wealth, LLC is a registered investment adviser in the State of Oregon, California. The adviser may not transact business in states where it is not appropriately registered, excluded or exempted from registration. Individualized responses to persons that involve either the effecting of transaction in securities, or the rendering of personalized investment advice for compensation, will not be made without registration or exemption.