The Discerning Investor

It is nearing the end of February, and you'd like to file your tax return, but you're missing a few forms you need to do your taxes. What should you do?

This is not an unusual situation, but waiting is probably not a good idea. It's better to reach out to the entity or person responsible for the missing form (1099 or W-2).

Many Form 1099s are scheduled to be sent out by the end of January, but not all. As an example, the website for Fidelity Investments includes a Tax Form Schedule with the "approximate availability of tax forms" (tinyurl.com/2s49x58z). Form 1099-R has a Jan. 31, 2025, reporting deadline, while Form 1099-DIV and Form 1099-B each have a reporting deadline of Feb. 17, 2025.

The issuer may have an extension beyond these dates. The website for Merrill, an investment and wealth management division of Bank of America, notes it has a "regulatory due date with extension," along with an explanation that "Merrill requests an extension with the IRS so that we can validate the information that we're providing. Due dates shown reflect the regulatory deadline as a result of this extension" (tinyurl.com/564rf3wm). For Form 1099-R, it is March 3, while the Consolidated 1099 Tax Statement has a deadline of March 20.

Also, the 2024 Tax Guide for BNY Pershing, a financial services company, indicates that Form 1099-DIV and Form 1099-MISC are due to the recipient on Feb. 15, adding that the due date applies when "the forms are included in a 'composite form recipient statement' as defined by the IRS" (tinyurl.com/2ks3swrt).

What's behind the various dates? An IRS spokesperson explained that payors "can and sometimes do request extensions of time to furnish statements to recipients, but extensions are not automatic and, when granted, are normally for no more than 30 days."

The spokesperson noted that the deadline for items such as brokerage statements, "especially where the payor has elected consolidated reporting," was Feb. 15, although this year, with Feb. 15 falling on a Saturday, followed by the Presidents Day holiday on Feb. 17, the deadline was Tuesday, Feb. 18.

If you are expecting Schedule K-1s from trusts, estates, partnerships and S corporations, the wait will likely be longer, and for good reason. "These respective pass-through entities need to prepare their own returns before they can properly determine what to put on the K-1," the IRS spokesperson explained.

In short, there is some variation to when the forms will arrive. That's a good reason to start with contacting the firm issuing the form.

If, after contacting the firm, you still do not receive a copy of the needed form by the end of February, you can reach out to the IRS for help by calling 800-829-1040 (tinyurl.com/4eezy4dd). You will need to provide your name, address (including ZIP code) and taxpayer identification number (for example, your Social Security number or individual taxpayer identification number). In addition, you will also need the employer's or payor's name and address (including ZIP code).

The IRS will contact the payor to request the missing (or corrected) form.

The IRS will also send you Form 4852, which has the lengthy title of "Substitute for Form W-2, Wage and Tax Statement, or Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc." (tinyurl.com/mpfbmeu2). In addition, there will be a letter that contains instructions on how to use the form to provide the IRS with an estimate that will allow you to file your tax return before April 15 (or Oct. 15, if you request and receive an extension -- see tinyurl.com/yuud33y6).

Note that if you do receive the missing or corrected form after filing your return and the information is different from your estimated numbers, you will need to file Form 1040-X, Amended U.S. Individual Income Tax Return (tinyurl.com/52rut8ts).

A final caution from the IRS spokesperson: "Even after getting any of these forms, check them over carefully. If there are errors or if something doesn't seem right, contact the payor and get it corrected.

"Correcting mistakes up front can help avoid possible IRS correspondence down the road, or the need to possibly file an amended return later."

DISTRIBUTED BY ANDREWS MCMEEL SYNDICATION

Are you looking for a tax professional to help you do your taxes this year?

First things first. Avoid scam artists.

In its "Dirty Dozen" list of common scams, the IRS warns about "ghost preparers," who can disappear after the tax return is prepared, charge a large percentage fee of the refund or steal the entire tax refund, and get taxpayers to take advantage of tax credits and benefits for which they don't qualify (tinyurl.com/msemaess).

If you are scammed, file a police report and fill out IRS Form 14157-A, Tax Return Preparer Fraud or Misconduct Affidavit (tinyurl.com/yxxxvzf6), detailing your complaint. That's the advice of The Taxpayer Advocate Service, an independent IRS organization that serves as the "voice" of taxpayers (tinyurl.com/y389h2xx).

Second, consider the guidance offered by the IRS on how to find someone to work with by reading "Need someone to prepare your tax return?" at tinyurl.com/bddzbj5b.

From there, you can explore the IRS search engine at "Directory of Federal Tax Return Preparers with Credentials and Select Qualifications" (tinyurl.com/5aes58zn). The National Association of Tax Professionals recommends the IRS database to "search for the perfect preparer" (tinyurl.com/vbff635u).

You'll be able to find tax preparers in your area who either currently hold professional credentials that are recognized by the IRS or who have an Annual Filing Season Program -- Record of Completion, which is issued by the IRS to those who "obtain a certain number of continuing education hours in preparation for a specific tax year," according to the IRS webpage "Understanding tax return preparer credentials and qualifications" (tinyurl.com/yeyjd5en).

As to credentials, anyone can be a paid tax return preparer provided the person has an IRS preparer tax identification number (PTIN). That includes certified public accountants, enrolled agents and attorneys -- but it also can be someone who does not have a credential in one of those areas. Paid preparers are required to include their PTINs on the tax returns they process.

Another element to consider is "representation rights." If the tax professional has unlimited representation rights, that means the person can represent a client on any matter, including an audit or a payment/collection issue. Those professionals include enrolled agents, CPAs and attorneys.

If a tax preparer has limited representation rights, the person cannot represent clients regarding appeals or collection issues. See "Understanding tax return preparer credentials and qualifications" for more details.

Third, consider these IRS tips:

-- Find a tax preparer who is available throughout the year, in case you have questions after the filing season.

-- Make sure you understand the preparer's credentials and fees.

-- The preparer should ask to see your records and receipts.

-- The preparer should offer IRS e-file (tinyurl.com/bde2ux4e), which can mean a quicker refund provided a taxpayer files electronically and chooses direct deposit. Be sure that the routing and bank account numbers on the tax return are accurate.

-- It is your responsibility to review the return before you sign it, and to ask questions if something does not appear to be correct. Be sure to get a copy of the complete tax return, signed by you and the preparer.

-- Qualified individuals can take advantage of Volunteer Income Tax Assistance and Tax Counseling for the Elderly, two IRS programs that offer free tax preparation. See tinyurl.com/wcfxxvd3.

Considering what is at stake -- the relationship between you and the IRS when it comes to taxes -- be sure to take the time to find a qualified tax preparer (if you need one). But don't take too long -- the federal filing deadline for taxes this year is April 15, and the IRS expects more than 140 million individual tax returns to be filed before then, with more than half of all returns projected to be filed with the help of a tax professional (tinyurl.com/49k8hh76).

Don't forget: No matter who you decide to work with, "[t]axpayers are ultimately responsible for all the information on their federal tax return, regardless of who prepares the return," quoting the IRS (tinyurl.com/3styb7h2).

On another note, help me decide whether to give presentations (live or online) on the topics we talk about in this column. Email me at readers@juliejason.com.

DISTRIBUTED BY ANDREWS MCMEEL SYNDICATION

It's time to do some estate planning research together. A great place to start is the American College of Trust and Estate Counsel (ACTEC), which is an "organization of trust and estate lawyers and law professors in the United States and around the world," according to the ACTEC website (tinyurl.com/mtptvbc2).

The ACTEC website is robust (tinyurl.com/y48v8ukd). There are more than 80 videos and transcripts, so take your time to find ones that might be relevant to the questions you have.

Some topics are basic ("Estate Planning Checklist for After Someone Dies"; "Living Trusts and the Impact on Taxes"). Others are novel. For example, "Digital Asset Management in Life and Death": This involves online accounts (including photos), travel points and cryptocurrency. Do you want a "digital death" for some accounts that you don't want your family to have access to once you are gone?

If you are an AI fan, you'll enjoy watching "Use of Artificial Intelligence (AI) in Creating an Estate Plan," which discusses the limitations of AI and why it might not be ideal to use AI instead of hiring an attorney.

There are also videos that cover unique situations. "Understanding Special Needs Trusts" deals with trusts that "contain provisions that are designed to protect the assets in that trust in a way that continues to preserve public benefits that a person with a disability who is the beneficiary of that trust may be entitled to."

And more: "Estate Planning for a College Student or Young Adult" focuses on when your college-bound child turns 18 and becomes an adult. Do you need power of attorney and an advanced medical directive so you can continue to talk to doctors in case your child has an accident while at school?

"Motivating Heirs with an Incentive Trust": An incentive trust is set up with benchmarks "that trigger the trustee to make greater or fewer trust distributions when a particular conduct or behavior of a beneficiary can be observed." Those "behaviors" could include something like getting good grades.

"Can I Do a Will for Myself?": While this video notes that you can do one, each state has different requirements about what a will has to say in order to be valid (for example, some states accept a handwritten will, while others do not).

Law firm websites are also good resources for research. As an example, Connecticut law firm Cummings & Lockwood LLC offers a white paper titled "Relocating to Florida," which addresses, among other topics, wills and estate planning (tinyurl.com/y6a8ykxj).

Quoting the white paper: "A person relocating to Florida should review the peculiarities of Florida law with a qualified estate planner in order to determine the appropriateness of his or her current estate plan. Although you may not need to rewrite your will, there may be good reasons for considering a revision."

Another example: Law firm website Wollman, Gehrke & Associates of Naples, Florida, features an article on wills and trusts by attorney Edward E. Wollman (tinyurl.com/wkfcfr78). He points out that "Probate can be lengthy and costly in Florida. A well-drafted trust allows your estate to bypass the probate process, ultimately saving time and facilitating a seamless transfer to your beneficiaries."

In short, there is a lot of information to gather and consider -- even how to hire a lawyer.

ACTEC offers a search engine that allows you to find ACTEC "Fellows" (an ACTEC Fellow must have "more than 10 years of experience in the active practice of probate and trust law or estate planning" -- tinyurl.com/55zckbjz). You can also contact your state bar association for more information about estate planners in your area.

Doing some of your own research can help prepare for a meeting with an estate planning attorney. The resources are plentiful and well worth your time.

DISTRIBUTED BY ANDREWS MCMEEL SYNDICATION