As we prepare for the upcoming tax season here are a few reminders.
1099 Delivery Reminders
• Realized gain/loss (cost basis) and IRA distribution details are included on your 1099 tax documents coming directly from TD Ameritrade. Please provide your 1099s to your tax professional for preparing your 2019 tax return.
• Clients who have established online access can also access any 1099s and either print, save, or email them to their tax professional. In order to switch between accounts, click on the filter at the top of the screen to select the appropriate account.
• Also, clients who wish to download their account information directly into TurboTax or H&R Block should use their account number as their username and the Document ID located in the upper right-hand corner of the 1099 form as their password.
• We fully understand the frustration corrected 1099s often cause as neither JNBA nor TD Ameritrade can control this delay in adjusted information. With global ecommerce, companies often have to modify reported dividends, interest, or capital gain information. As a result, by law, those companies are required to pass these revised figures on to the appropriate parties, in this case, TD Ameritrade.
JNBA requests your 2019 tax returns in order to provide well-rounded and accurate financial planning advice. If you did not sign a Tax Professional Authorization form, please send a copy of your 2019 tax return to your Advisory Team or upload your return to your JNBA Modestspark Portal.
• In order to make the April 15 deadline for IRA contributions, contribution checks (made payable to TD Ameritrade with “2019 contribution” written in the memo line) need to arrive at our office no later than April 10, 2020.
• If you need to confirm your IRA contributions already made for 2019 or are considering moving money from a non-IRA account to an IRA for your 2019 contribution, remember to allow time for processing to meet the April 15 deadline.
QCD – Qualified Charitable Distribution
If you are over age 70 ½ and gave money from your IRA directly to charity, please share those distribution details with your tax professional. The 1099-R generated for your IRA shows total distributions and does not include details on distributions to a qualified charitable organization. This will be important information to share as distributions to charity, up to $100,000, are not taxable.
Social Security Tax
Those who worked for multiple employers in 2019 may have paid too much in Social Security tax. The maximum amount withheld by employers was $8,239.80 per taxpayer. If your Social Security withholdings exceeded that maximum, you may be able to claim the excess as a credit.
Long-Term Care Insurance
If you own long-term care insurance, you may be eligible for an income tax credit for premiums paid during the 2019 tax year. Specifics vary from state to state, and you should consult your tax professional for additional information.
Minnesota Resident 529 Plan Contributions
As a Minnesota resident, you may be eligible for a Minnesota nonrefundable income tax credit or an income tax deduction for contributions to any state’s 529 plan. The nonrefundable income tax credit is subject to phase-out. You should consult your tax professional for additional information regarding the credit or deduction.
The Affordable Care Act requires that a taxpayer and each member of his or her family has qualifying health coverage for each month of the year, qualifies for an exemption, or makes an individual shared responsibility payment when filing his or her tax returns. Similar to last year, those who had qualifying health coverage for the whole year will simply have to check a box stating that they are covered.
Important Employer-Provided Benefit Reminders
As you gather documents for your 2019 tax return, this is a good time to complete a thorough review of your employer-provided benefits. Look for opportunities to increase your 401(k) contributions to maximize your savings for the new tax year, confirm the beneficiaries listed on your employer-provided benefits are still accurate, and determine if any adjustments should be made to your tax withholding. This can be a good question to ask your tax professional as they review your information to prepare your 2019 tax return.
JNBA is not an accountant and no portion of the above should be construed as accounting advice. All accounting issues should be addressed with an accounting professional of your choosing.
Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from JNBA Financial Advisors, Inc.
Please see important disclosures information at www.jnba.com/disclosure