Happy New Year! As we begin the 2020 tax filing season there are various items related to your tax preparation we would like to bring to your attention.
Understanding the information outlined in this letter will make the filing of your 2020 tax return much simpler. Everyone on your team at Creative Planning is here to assist with any of these items.
- Your custodian (i.e. TD Ameritrade or Charles Schwab) will mail initial 1099’s by the end of February. If you have elected to receive paper copies of these documents, you should receive your statements shortly after this date. The documents will also be available for download via your custodian’s website.
- TD Ameritrade: Click “My Account,” then “Tax Center.”
- Charles Schwab: Go to “Statements,” select an account and specify a date range, then use the Document Type filter to select “Tax Forms.”
- Fidelity: Click “Statements” tab, there will be a link for tax forms. The number of forms you can expect to receive is listed, as well as the estimated timeframe for each.
- Your 1099 information can be downloaded directly into Turbo Tax for those preparing their own returns. The details for downloading this information are outlined within TurboTax itself.
- It is possible you will receive a corrected 1099 after receiving your initial form in February. This is not due to an error on your custodian’s part; there are numerous reasons these can be created. We suggest preparing your return, but not filing until late March or early April. Doing so will allow you to quickly change any 1099 information necessary should you receive a corrected 1099 from your custodian.
Realized Gain/Loss Reports
All proceeds from stock sales and basis information that is on file will be included on the 1099 that you receive from your custodian. Our operations team can also generate a realized gain/loss report that you may find easier to use or help identify basis that may be missing on your 1099. Please contact your Wealth Manager if you or your tax preparer would like to receive this additional report.
Master Limited Partnerships/MLPs
- If you hold any Master Limited Partnerships in your portfolio, you will receive a K-1 for each position held during the year. The income on the K-1 needs to be included on your tax return. The K-1s are typically available around March 15th.
- You will receive a paper copy of your K-1, but you can also access your K-1s electronically by creating an account at www.taxpackagesupport.com.
- Some of the K-1s can be directly imported into TurboTax. Instructions for doing so are available within TurboTax.
Tax Filing Deadlines & IRAs
- Your Federal individual income tax return is due April 15th, 2021. If you cannot file your return by that date you may request a 6-month extension from the IRS. However, this is only an extension of time to file your completed return, not an extension of time to pay your taxes. If you have amounts that are due with your 2020 tax return, they must be paid by April 15th with your extension to avoid penalties and interest.
- Contributions to traditional, Roth IRAs, and SIMPLE IRAs can be made up to April 15th for the 2020 tax year. Contributions to SEP plans may be made up to April 15th or October 15th if you extend your tax return. We suggest you speak with your Wealth Manager by the end of March to ensure contributions can be addressed in a timely manner.
- Other tax form due dates are as follows:
- Form 1065 for a partnership or LLC is due March 15th, 2021
- Form 1120S for S Corporations is due March 15th, 2021
- Form 1041 for Trusts & Estates is due April 15th, 2021
- Form 1120 for C Corporations is due April 15th, 2021
- FinCEN 114—FBAR is due April 15th, 2021
If you have engaged Creative Planning Tax to prepare your income tax returns, we will obtain for you all Form 1099s and gain/loss reports from managed accounts, Master Limited Partnership K-1s, as well as other activity from your managed accounts. You will be receiving our Tax Organizer later this month to help you gather your other tax information. Everyone at Creative Planning is here to make this process as smooth as possible for you. Please do not hesitate to contact your Wealth Manager for any reason regarding these or any other topics.