Dear Investor,
As you manage your tax filings, it’s important to us to keep you informed and ensure you have accurate information and updates about the process for reporting your investment income. To provide more clarity about the mailing process for 1099 Consolidated Tax Statements for your LPL Financial accounts, below are a few questions and answers.
What determines when tax statements are mailed?
As the broker-dealer/custodian that supports me in providing you with investment services, LPL Financial prepares tax statements based on information provided to them by the companies that issued the products you are invested in. The IRS sets deadlines for when this information must be provided to LPL and to the IRS. These deadlines may vary depending on the type of investment. Sometimes more complex investments are likely to be reported later.
Sometimes these investments may even require reclassification, which means there are changes in how the dividend or capital gains income is reported after the information is sent to LPL and to the IRS. In turn, this requires LPL to change how your investment is reported on your tax statement.
The timing of your statement mailing depends on the types of investments held in your account(s). To minimize the risk of sending you information that may change later, the first 1099s sent are those with simple tax information that’s not likely to change. Account statements for more complex investments will be sent later to help ensure they contain the most accurate information. This also reduces the potential for you to receive an updated or corrected tax statement later on that might require you to refile your taxes.
Why do some accounts get corrected tax statements?
LPL delivered 1099 Consolidated Tax Statements in weekly phases, which are outlined below.
Even with LPL’s staggered weekly process, delayed reporting and reclassification can sometimes occur, which is outside of our control. For the most part—with rare exceptions— corrected 1099s are triggered by updates from security issuers after the IRS deadline. If you need to file an amended tax return, be sure to discuss the situation with your tax advisor prior to refiling so you can determine the best course of action based on your individual circumstances.
I hope this information is helpful to you, and I want to thank you for your continued confidence and trust. Please contact us if you have questions.
Sincerely,
Evan Kirkpatrick