Your Money
It’s tax season, and 1099 tax forms are being posted. However, you may not receive one even if you had reportable income in your account. Under IRS de minimis reporting rules, Schwab generates a 1099 only if at least one of the following conditions is met:
- Your account earned $10 or more in dividend income.
- Your account earned $10 or more in interest, royalties, or original issue discount (OID) income.
- You had a Form 1099-B reportable transaction, such as a stock sale or a buy-to-cover.
You can track your forms on the Charles Schwab 1099 Dashboard: www.schwaballiance.com.
- 1099-R forms for retirement accounts were posted in mid-January.
- 1099-DIV and 1099-INT forms will be available by the end of February.
- Be aware: 1099s are often corrected, with the final wave of updates last year occurring in late March.
Why Do 1099 Corrections Happen?
Investment funds—like mutual funds and ETFs—hold many underlying investments. Before reporting final income figures, fund companies must compile and verify data from all these holdings. This complexity often leads to reclassifications between interest, dividends, qualified dividends, capital gains distributions, and return of capital. If any errors or reclassifications occur, Schwab issues a revised 1099. (This is standard across firms like Merrill, Fidelity, and Vanguard.)
Expecting a K-1? Consider Filing an Extension
If you have partnership investments, your K-1 may not arrive until as late as October. Filing an extension can help you avoid stress and penalties.
Need assistance? We’re happy to securely send tax forms directly to your CPA or tax preparer—just let us know!
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