Tax Season is Upon Us!
I have been fielding several questions about tax reporting recently, which is no surprise given the time of year. Since most of us only dust off the books and do this activity once a year, a few reminders might help. This is not meant to be tax advice, of course; just a few reminders to help you get your paperwork moving in the right direction.
Distributions: If you took money OUT of your account(s) in 2017:
- You should have received a form 1099 which you will need to file with your taxes.
This is true regardless of account type (whether that be an IRA, an Investment Account, or even a 529 savings account). Any type of distribution should generate a 1099 form for reporting. If you took a distribution and didn’t receive a form 1099 yet, you should contact your financial institution.
Contributions (money going IN) are handled a bit differently, depending on the type of account.
If you have an employer-sponsored account: 403b (TSA or ORP), 401k, or SIMPLE IRA:
- Your contributions should be reported on your W2 from your employer.
- You won’t get a separate tax form.
If you have an IRA and/or Roth IRA:
- You SHOULD report this on your 2017 taxes; however, you WON’T receive the backup form 5498 until May. That’s because you’re allowed to make 2017 tax year contributions up until the tax filing deadline, so companies can’t produce the forms until after April 17th.
- If you aren’t sure how much you contributed in 2017, you can refer to your year-end statement.
- For our clients: if you are signed up for e-delivery, you won’t get a paper copy in the mail. Instead, you will need to log in at https://app.trustamerica.com/liberty/desktop/sdw. Click on “About Your Account” and then “Statements.”
- If you have questions or are unsure about this, please contact us, and we’ll be happy to help you.
If you have a 529 College Savings Account:
- Depending on your state and the 529 plan, contributions may be deductible for state tax purposes. In the state of Texas, where we don’t have state income tax, you can sit back and relax. Contributions do not need to be reported, as they are not federally deductible.
Finally, if you have an Individual or a Joint Investment Account:
- You should have received a “Consolidated 1099” tax packet which you will need to report on your taxes. This would include Forms 1099-B, 1099-DIV, 1099-INT, 1099-OID and 1099-R.
- For our clients: Good News! Trust Company of America now integrates with H&R Block AND TurboTax! That means you should be able to import your TCA tax data electronically and simplify your tax reporting. From either H&R Block or TurboTax, simply type in “Trust Company of America” as your financial institution. Enter your Liberty username and password when prompted, and your 1099 tax information will display. You will then be able to select which 1099 information you want to import.
- If you don’t use H&R Block or TurboTax, you will need to log in at https://app.trustamerica.com/liberty/desktop/sdw. Click on “About Your Account” and then “Tax Documents” to access your tax forms.
Hope this helps you during the current tax season. Tax reporting is not fun, but it’s necessary, so it’s best to just get through it. Personally, I like to reward myself with something fun when I’m done, like an hour or two of watching a favorite Netflix series. (Right now, “The Crown” is calling… )
Happy Tax Season,
Shadowridge Asset Management, LLC does not offer tax planning or legal services, but may provide references to accounting, tax services or legal providers. They may also work with your attorney or independent tax or legal advisor.