When it Seems Taxing: Five Tips for Navigating your 1099s

Published: February 2, 2018

In a year when the news is filled with tax changes that won’t hit until next year, it’s time to focus on the present. Tax filing season is here again.  You have probably already received a detailed planner from your tax accountant, asking for documents, ranging from records of your charitable donations, to W-2s and K-1s. Not to be forgotten are your 1099s, which report the various types of income you may receive other than salary earned and pass-through income from partnerships and corporations. Here are some pointers to help you navigate through the information coming your way:
1) The IRS knows. Most income information that is sent to you is also sent to the IRS, so it’s important to report it all on your tax returns.  Please keep in mind that for your KF Advisors accounts, your custodian will send your 1099 only to the account address of record, not to all other parties associated with an account, such as your accountant. If you would like others to also receive a copy of your 1099, just let us know, and we will have a copy securely sent to the designated recipient(s).
2) No 1099? No excuses. It happens; 1099s are sometimes issued late or go astray. The IRS does not accept excuses, and you are responsible for reporting income with or without a 1099. So be on the lookout, make sure your personal information is up to date with your account record keepers and be proactive if you think you should have received a report.   
3) It’s a digital world. If you have signed up to receive statements from your custodian electronically, it’s likely that extends to your 1099s. That means you may have to go online to access and print PDFs of your 1099s, but also that you can access them earlier and again, as needed.  You should receive an email letting you know when they are available, but, again, be proactive.
4) Things change. You may receive amended 1099s, which is very common, most often due to adjustments made by the payers or issuers. Each amendment that goes to you also goes to the IRS, and you are responsible for reporting the most up-to-date information. If your taxes have already been filed when an amended 1099 arrives, let your tax accountant know, and they can advise you on whether action is needed.
5) 1099 what? While it may feel like someone is playing an elaborate pun with some of the different 1099s out there, each mysterious letter or acronym following the 1099 indicates a specific source of income. They don’t go quite from 1099-A to Z, but it’s close. Not to mention 1098s, 5498s and other reports. A few that you are most likely to see: 
Dividend income
Interest income
Miscellaneous income–income that doesn’t fit into any of the other 1099 categories; covering such items as royalties/broker payments in place of dividends or interest, freelance income, prize or award money, etc.
Distributions from pensions, IRA, profit-sharing or retirement plans, disability payments, charitable gift annuities
Unemployment compensation, tax refunds and certain other government payments
Gains and losses from the sale of securities or exchange of goods or services through a barter exchange
Sale or exchange of a residence for $250,000 or greater ($500,000 or more if the seller is married)
Social Security Benefit Statement


For questions or more detailed information, please consult with your tax accountants. You may also want to visit these pages on the IRS website.


Important Disclosures

This material is provided for informational or educational purposes only and should not be construed as investment, accounting, tax or legal advice. Always consult a financial, tax and/or legal professional regarding your specific situation. This communication is not intended as a recommendation or as investment advice of any kind. It is not provided in a fiduciary capacity and may not be relied upon for or in connection with the making of investment decisions. Nothing herein constitutes or should be construed as an offering of advisory services or an offer to sell or a solicitation to buy any securities or a recommendation to invest in any specific investment strategy. Investing involves risk, including the possible loss of principal. Past performance is not indicative of future returns. The views expressed herein are as of a particular point in time and are subject to change without notice. The information and opinions presented herein are general in nature and have been obtained from, or are based on, sources believed by Klingenstein Fields Advisors (“KF Advisors’) to be reliable, but KF Advisors makes no representation as to their accuracy or completeness. Although the information provided is carefully reviewed, KF Advisors cannot be held responsible for any direct or incidental loss resulting from applying any of the information provided. KF Advisors represents two investment advisers registered with the Securities and Exchange Commission: Klingenstein, Fields & Co., L.P. and KF Group, LP. If you are a KF Advisors client, please remember that it remains your responsibility to advise KF Advisors, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services.