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Integrated Wealth Management

5 Tips on when to file your tax return (and when to expect the information you need)

Depending on your sources of income and the types of investments you have, it may be a good idea to wait to submit your tax return until close to the April filing deadline.  Based on our experience, here are some thoughts on the timing of your preparation and when you can expect to get all the information you need.

1. Potentially File Early

If you have a relatively simple tax return and only have wage (W-2), contract work/rent (1099-MISC), or social security (SSA-1099) income, you should have everything you need to file your taxes by mid-February.  Basic 1099-INT or 1099-DIV forms should be available by early February.  Also note that the IRS does not require banks or investment custodians to send some 1099s if the amount to be reported is less than $10.00, so you don’t need to hold out for “de minimus” information like this.

2. File Mid-Cycle

If you have individual stocks, ETFs, and mutual funds, you will likely have the forms you need by late February.  IRS requires 1099 tax statements to be issued by February 15th.  However, because corrected 1099s on these investments are typically not issued until late February, it is best to wait to file until the first or second week of March in case a correction comes in.

3. File Late-Cycle

If you have more complex securities such as real estate investment trusts (REITs), mortgage pools, OID bonds, and unit investment trusts (UITs), it’s best to wait until late March or early April.  IRS regulations allow a March 15th due date for the release of tax information for some investments, and we have seen custodians take full advantage of this.

4. Extensions

If you own certain private/alternative investments such as limited partnerships (LPs, MLPs, etc) that issue K-1s, it may be best to obtain an extension or file near the deadline in case corrective information comes in.  Just remember that even with an extension, your payment - if you owe taxes - is still due by the April deadline!

5. One good reason to file early

If you anticipate a large tax refund, you should consider filing as early as you can.  We have seen an increase in the theft of tax refunds – where criminals use your identity to file a fraudulent tax return and steal your refund.  Filing early should mitigate this risk.

Bonus Tip: Start preparing your return as soon as you start getting tax records in late January, but simply wait to submit it until you are confident the information is accurate.  Good luck!