2020 Tax Year Guidance

Timing

If you plan on filing by this year’s April 15, 2021 deadline, we recommend waiting until mid-to-late March to provide your tax preparer with your tax reports. Investment companies sometimes amend the original Form 1099 reporting of income, so filing in March helps ensure that you have the most up-to-date forms. Please also touch base with your tax preparer to understand their timing preferences as well.

Security

Starting January 2021, the IRS expanded its Identity Protection PIN (IP Pin) Opt-In Program The IP PIN is a six-digit number assigned to eligible taxpayers to help prevent cybercriminals from filing a fraudulent income tax return using your personal information. The IRS and other tax groups are urging taxpayers who want proactive protection against identity theft when filing their Form 1040s to opt into the program. We encourage you to discuss the program further with your tax return preparer. You can learn about it here.

2020 IRA and Qualified Retirement Plan Distributions

IRA and Qualified Plan custodians should issue by January 31, 2021 Form 1099-R to report distributions and income taxes withheld from 2020 IRA and Qualified Retirement Plan distributions.

Return of 2020 RMDs or Rollover of 2020 IRA and Qualified Retirement Plan Distributions

As previously communicated, 2020 required minimum distributions from IRAs and Qualified Retirement Plans (2020 RMDs) were waived in March 2020 pursuant to the CARES Act. The IRA custodian should issue Form 5498, IRA Contribution Information by May 31, 2021 to report the return of 2020 RMDs as well as the rollover of other IRA and Qualified Retirement Plan Distributions that occurred during 2020.

Please note that Form 5498 is often sent out after the April 15 tax filing deadline because IRA contributions can be made up to the deadline for the prior year. The form is for your tax records and does not need to be sent with your return. Please communicate the return of your RMD to your tax return preparer so that the returned RMD is not reported as taxable income.

Upon receipt of the Form 5498, you should verify that the reported amount returned to your IRA or Qualified Retirement Plan Account matches your records.

2020 IRA Nondeductible Contributions

If a 2020 nondeductible contribution was made to an IRA, Form 8606, Nondeductible IRAs should be filed with your Form 1040. Filing this form will report to the IRS the tax basis amount in your IRA so that the nontaxability of future IRA distributions can be substantiated. Keeping track of the tax basis in an IRA is the taxpayer’s responsibility and not the IRS or IRA custodian.

Qualified Charitable Distributions (QCDs)

Note that Form 1099-R received from the IRA custodian does not disclose the amount of 2020 QCDs from the IRA.

  • If you directed your IRA to make a QCD in 2020, we will be providing you with documentation reflecting distributions that we assisted in processing with you and the custodian.

  • If you issued checks from your IRA for QCDs, we recommend reviewing the check register and providing your tax preparer with these details.

Taxable Account Reporting

Municipal bond fund interest

National municipal bond funds held in your taxable account(s) include bonds disused by many U.S. states. We have included the links below for the most commonly held municipal bond funds held in our managed portfolios to assist you and your tax preparer in determining the portion of the interest from the fund(s) that may or may not be subject to state taxes.

Alternative Investments

Schedule K-1

If you own an alternative investment, you may receive a Schedule K-1 that reports your share of an entity’s taxable income, deductions, credits, etc. Given the nature of these investments, Schedule K-1s are generally issued later in the year and may necessitate a later time for filing your income tax returns.

Transferred/Closed Accounts

  • Please note that if you closed a brokerage account during 2020, a Form 1099 will still be generated for the closed account. Please check with the custodian of the closed account or your Modera team if you do not receive the document.

  • In addition, if you transferred an account from one brokerage firm to another during 2020, you will likely receive two Form 1099s, one from the former firm and one from the current firm.

Custodian Mailing Schedule For 2020 Tax Reports

Our recommended custodians have provided us with the following estimated mailing dates for your 1099s and other tax related documents.  Please note that the dates are estimates and that actual mailing dates may vary.  In addition, custodians may send corrected form 1099s, which should be forwarded to your tax preparer upon receipt.

Charles Schwab

1099 1st Mailing:
Late January to Early February

1099 2nd Mailing:
Mid-February

TD Ameritrade Institutional

1099 1st Mailing:
January 14, 2021

1099 2nd Mailing:
February 4, 2021

1099 3rd Mailing:
February 11, 2021

Fidelity Investments

Retirement Tax Forms (5498, 1099-R):
January 21, 2021

1099 1st Mailing:
January 23, 2021

1099 2nd Mailing:
February 13, 2021

1099 3rd Mailing:
February 27, 2021

1099 4th Mailing:
March 5, 2021

National Advisors Trust Company

Retirement Tax Forms (1099-R):
February 1, 2021

1099 1st Mailing:
February 15, 2021

1099 2nd Mailing:
March 1, 2021

1099 3rd Mailing:
March 15, 2021

1099 4th Mailing:
April 12, 2021

Please do not hesitate to reach out to your wealth manager if you have any questions.