facebook twitter instagram linkedin google youtube vimeo tumblr yelp rss email podcast phone blog search brokercheck brokercheck Play Pause
Don’t Let the 16 Variations of This Tax Form Mess Up Your Tax Return Thumbnail

Don’t Let the 16 Variations of This Tax Form Mess Up Your Tax Return

Whether you're a long-term retiree or are on the glide slope, it's that time of year again to collect all of your various documents and prepare to file your taxes. Where your income is coming from, how it's reported, what forms you use, what has been withheld -- these are all things that need to be gathered and accounted for. It can be confusing and it seems that so much continues to change with respect to filing your tax returns. 

On today's show, we offer some timely and helpful advice on things we see the most in our firm during tax season. This episode will be especially helpful if you're new to the various 1099 forms.

Download the Transcript Here

Listen to the Episode

Simply "click" or "tap" on the "play" icon in the image below to listen to the episode. If you'd like to subscribe to the podcast using an Apple product (iPhone, iPad, iPod touch) click here to learn how. If you use an Android phone, we recommend using the Podcast Addict App, which can be downloaded here.

Insights from Today’s Podcast on Taxes and the 1099

Many people receive a 1099 form when they retire. But there are many varieties of the 1099 form and it's important to understand what they mean so you can appropriately file your tax return.

1. Which 1099?

Sixteen. That's how many different kinds of 1099 forms there are. The most common ones our clients work with are the 1099-R, which reports distribution from retirement accounts, and the 1099-B, which accounts for non-IRA taxable accounts. Dividends from your stocks are reported on a 1099-DIV. Interest on your savings go on 1099-INTs. Income from...I think you get the picture.

The important point is: the IRS looks at various sources of income in different ways. Whether you file your own taxes or use a CPA, don't keep one 1099 and throw the rest away. They're not duplicates, they're different forms that account for different sources of income.

The good news is that as tax forms go, 1099s are pretty easy to work with if you're doing your own taxes. Qualified and non-qualified dividends, what's exempt, what isn't -- your custodians will have everything broken down for you to fill into the appropriate box.

However, if you're the kind of person who likes to get a jump on taxes, be mindful of what kinds of investments you have and how they are reported. If you have accounts that generate income reported on 1099-DIV or B forms, it is best to wait until mid-March to file. That way, if any of your 1099s are amended, you'll receive the amendments before you file, not after.

2. Owning gold can get expensive

This time of year a lot of retirees reassess their various investments, which is something we encourage. The Roth IRA comes up for discussion a lot, both for its popularity and because it might be facing some changes. Many of our clients ask us if a Gold IRA or owning gold outright is a good alternative, or something they should add to their plan. While we do offer precious metals in our portfolio at Keen Wealth Advisors, we haven't found owning gold outright to be a particularly effective investment over time. Buying gold can be a lot like buying a car -- the second you drive it off the lot, it depreciates in value due to the high bid / ask spread. Then you have to pay to transport it. Then you have to pay to store it. Then you have to pay to insure it. When you want to sell it, you have to appraise it. All those little costs can add up to losses on your investment.

3. That Form 5498 is not late

Every year we get calls from confused clients asking why they're receiving a Form 5498 for the previous tax year. That form isn't late, it's just how the IRS handles contributions to IRA accounts. By law, 5498s are not required to go out until May 31st of the year following the event. This form is just your proof of contributions to your IRA, which you should have reported on your taxes anyway. You might end up with similar questions if you receive a 1099-R on your rollovers. No, that's not a distribution, it's a trustee to trustee transfer that the IRS is not going to tax.

4. Don't go it alone

Retirement taxes can get complicated really fast. Even if you prefer doing your taxes yourself, it's never a bad idea to ask an advisor or a CPA to check your work. Also, while the odds may be low, we have had clients use consumer grade, online tax preparation services and have their Social Security numbers and bank information compromised by hackers. This can lead to delayed, and even stolen, tax refunds, in addition to all the other headaches you can imagine.

However you choose to prepare your taxes, it's always a good idea to at least talk to professionals. At Keen Wealth we tell our clients that learning everything you can about your financial plan is the best way to take charge of your retirement and keep surprises to a minimum -- especially when the IRS is involved.

 Bill Keen on paying your taxes in retirement ...

“We don't expect our clients to be tax experts, but talking to a professional and being engaged can go a long way towards providing peace of mind about your finances.”

Please share this page and the podcast with your friends and colleagues via Linkedin, Twitter and Facebook. You can use the share buttons. Thanks!

Got a question or comment? Email it to me and we'll get back to you or call our office at (913) 624-1841. 

About Bill

Bill Keen is a CHARTERED RETIREMENT PLANNING COUNSELOR℠ and independent financial advisor with more than 25 years of industry experience. As the founder and CEO of Keen Wealth Advisors, a registered investment advisory firm, he specializes in providing personalized retirement planning designed to help people thrive before and during their retirement years. With a passion for educating others, Bill regularly blogs about retirement planning, hosts the podcast Keen on Retirement, and has contributed to U.S. News and World Report, Reuters, Wall Street Journal’s Market Watch, Yahoo Finance, and other publications. Based in Overland Park, Kansas, Bill and his team work with clients throughout the greater Kansas City area and across the nation. To learn more, connect with him on LinkedIn or visit www.keenwealthadvisors.com.

KWMG, LLC’s dba Keen Wealth Advisors (“company”) is an SEC Registered Investment Advisor located in Overland Park, KS. The company and its representatives may only conduct business in those states where registered or where excluded/exempt or from licensure. For registration information please contact the SEC or the state securities regulators for the states where the company is notice filed. A copy of the company ADV is available upon request. Advisory services are only offered to clients or prospective clients where the company and its representatives are properly licensed or exempt from licensure. No advice may be rendered by the company unless a client service agreement is in place. This information is not intended to be investment advice or construed as a recommendation or endorsement of any particular investment or investment strategy and is for illustrative purposes only. Clients and prospective clients must consider all relevant risk factors involved with each strategy, including costs or fees, and their own personal financial situations before trading.

The views outlined in the book, Keen on Retirement Engineering the Second Half of Your Life, are those of the author and should not be construed as individualized or personalized investment advice. Any economic and/or performance information cited is historical and not indicative of future results. Economic forecasts set forth may not develop as predicted.

The Amazon Best Seller ranking listed on marketing materials is specifically referring to Best Seller rankings for the Kindle Top 100 Paid Lists under the subcategories of: Budgeting and Financial Risk Management, based on data as of September 5, 2019. Amazon rankings although relevant on how a product is selling overall doesn’t necessarily indicate how well an item is selling among other similar items or similar item categories. Amazon may choose the most popular categories or subcategories within which an item has a high ranking to determine its best seller rankings. These rankings are updated hourly and as a result, should be expected to fluctuate as such. Keen Wealth Advisors and Amazon are not affiliated entities. For further details on Amazon rankings please visit https://www.keenwealthadvisors.com/important-disclosures.

Schedule a Complimentary 15 Minute Strategy Call

Schedule a Time