Monday, February 12, 2007

Watch Out - Revised 1099s May Cause Amended Tax Returns

In the Wall Street Journal article The Risk of Filing Taxes Early, the growing issue of revised 1099 forms is reviewed. 1099 forms are used by banks and brokerages to report one's income to the IRS. In the past three years, the occurrence of revised 1099 forms have been increasing. I have received revised 1099s for the past two years.

This year may even be worse since the IRS is now requiring institutions to report tax exempt interest which is subject to AMT taxes. This has caused some institutions to request an extension of up to 30 days for sending out 1099s.

In some cases, the revised 1099 won't have any impact or provide a small additional refund. In these cases, one can choose not to file an amended return. However, in other cases, taxes will be owed, requiring the filing of an amended tax return.

Now, I already dislike the task of filing my tax return one time. I surely don't want to file a return twice. Since I received revised 1099s (and W-2s) the past couple years, my plan is to wait until April, 2007 to file my tax return. By then, all 1099 and W-2 revisions will need to be complete and correct.

For more Strategies and Plans , check back every Monday for a new segment.

Photo Credit:, Stuart Whitmore

This is not financial advice. Please consult a professional advisor.

Copyright © 2007 Achievement Catalyst, LLC

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