Tax season is here once again. (We know you’re excited.) For a smooth and painless experience, we encourage you to follow these tips:
Tax forms from Fidelity and TD Ameritrade
Fidelity has mailed out and/or made all Form 1099-Rs for retirement accounts available on your Fidelity.com login. As of January 27, Fidelity released the first group of Consolidated 1099 forms for non-retirement accounts; the second group of Consolidated 1099 forms will be sent out February 17. Some of you may receive additional corrected Consolidated 1099 forms, which are estimated to be complete by March 3.
TD Ameritrade has mailed out and/or made all 1099-R retirement forms available on your AdvisorClient.com Login. TD Ameritrade also sent out the majority of the Consolidated 1099 forms for your non-retirement accounts, and the last group is scheduled to be sent out on March 9, 2017.
Note that these dates are estimates and depend on when information is provided by mutual fund and other investment companies to Fidelity and TD Ameritrade. Please let us know if you have any questions or concerns regarding your tax forms.
With the rise in computer hacking and data breaches, securing client information is more important than ever. Here at Redwood, protecting your data is of one of our main priorities. We have two secure online portal features (Black Diamond and eMoney) that enable you to upload data in a safe and secure manner. As you begin to share tax documents with your tax preparer or Wealth Manager, please use these options or the secure portal provided by your tax preparer. If you do send any items via email be sure to password-protect them.
If you’ve been a victim of identity theft in the past and were issued a notice from the IRS, you’ll need your IP PIN number to electronically file your 2017 tax return. The IP PIN changes every year, so ensure you have a copy of the most recent letter that the IRS sent you. (You should have received it in late December/early January.)
If you’re a resident of Georgia, Florida or Washington D.C., you don’t have to be a victim of identity theft to qualify for an IP PIN. You can “opt in” as part of the IRS’ pilot program.
Although you’re probably an expert at filing your own taxes, please ask a CPA, Enrolled Agent or your Wealth Manager to double-check your self-prepared tax return before you e-file. An extra set of eyes never hurts – and may help you catch mistakes that other tax software might not. (For example, a common error found on DIY returns is accidently including non-deductible – or “back-door Roth” – contributions as income on Form 8606.)
Don’t disregard your foreign accounts
It can be fairly easy to lose track of assets you have overseas, but the IRS wants to know about them. Anyone with foreign financial accounts whose aggregate value exceeded $10,000 at any time during 2017, must file a Report of Foreign Bank and Financial Accounts (FBAR) in addition to his or her personal tax return by the filing deadline.
Consider updating your withholding
If you do end up writing a large check this tax season, consider adjusting your W-4. You may not be withholding enough taxes from your paychecks. On the other hand, if you receive a large refund, you may have withheld too much last year. Generally, increasing the allowances on your W-4 will cause less tax to be withheld, and decreasing your allowances will allow more to be taken out. To see if a change makes sense for your situation, consult your tax preparer or Wealth Manager.
If you’d like to discuss any of this in more detail, our Redwood team is here to help. Happy filing!