As you manage your tax filings, it’s important to us to keep you informed and ensure you have accurate information and updates about the process for reporting your investment income.
To provide more clarity about the mailing process for 1099 Consolidated Tax Statements for your LPL Financial accounts, below are a few questions and answers.
What determines when tax statements are mailed?
The broker-dealer/custodian that supports us in providing you with investment services, LPL Financial, prepares tax statements based on information provided to them by the companies that issued the products you are invested in. The IRS sets deadlines for when this information must be provided to LPL and to the IRS. These deadlines may vary depending on the type of investment. Sometimes more complex investments are likely to be reported later.
Sometimes these investments may even require reclassification, which means there are changes in how the dividend or capital gains income is reported after the information is sent to LPL and to the IRS. In turn, this requires LPL to change how your investment is reported on your tax statement.
The timing of your statement mailing depends on the types of investments held in your account(s).
To minimize the risk of sending you information that may change later, the first 1099s sent are those with simple tax information that’s not likely to change. Account statements for more complex investments will be sent later to help ensure they contain the most accurate information.
This also reduces the potential for you to receive an updated or corrected tax statement later on that might require you to refile your taxes.
Tax statement mailing schedule for 2020:
LPL mails
1099 Consolidated Tax Statements
in four phases, which are outlined below:
Wave 1
January 31
Includes accounts with the simplest tax information and not subject to income reclassification
Wave 2
February 18
Includes accounts holding securities (REIT, UIT, foreign security or municipal bond funds) that may be subject to income reclassification.
Wave 2
February 20
Preliminary 1099 Consolidated Tax Statement – DRAFT COPY. Includes accounts that will not receive a final 1099 Consolidated Tax Statement until March 2 or March 16
Wave 3
March 2
In the event investment companies do not furnish tax information to LPL in time for the February 18 mailing deadline
Wave 4
March 16
In the event investment companies do not furnish tax information to LPL in time for the February 18 or March 2 mailing deadline and any accounts that hold securities that provide mortgage backed income reporting information
Why do some accounts get corrected tax forms?
Even with LPL’s staggered mailing process, delayed reporting and reclassification can sometimes occur, which is outside of our control. For the most part—with rare exceptions— corrected 1099s are triggered by updates from security issuers after the IRS deadline. If you need to file an amended tax return, be sure to discuss the situation with your tax advisor prior to refiling so you can determine the best course of action based on your individual circumstances.
Filing later (as close to the April 15th as possible) may prevent you from having to revise your tax return.
We hope this is helpful to you, and we want to thank you for your continued confidence and trust. Please contact us if you have questions:
(865) 226-9982
