Don't rush into filing tax returns too early - rant...

[BlueMR2]

Perhaps more of a general rant, but read on for mostly tax hilarity!

I remember reading a few weeks ago how people already had their taxes filed.  I've been carefully tracking everything as it came in.  I *thought* had it all a few days ago (as we had paperwork that matched everything we knew about, comparing last year +/- this years changes), so we sent out the taxes to my tax professional (a relative that does them for no charge).  Now, yet another 1099 rolls in (from Vanguard)!  Some brokerage account thing that we've not had in previous years (and neither one of us are aware of any changes we made that could cause this new mystery account to appear).  Called up Vanguard late in the day and they weren't very clear on exactly what it is and it didn't get resolved on the first call.  So, my wife and the tax person are going to fight it out with Vanguard next week to try and figure out where this came from and why we haven't had it before.  The thing of note is that Vanguard said that taxes should not be filed before April as they (Vanguard) have up until March 31st to send out 1099s!  Apparently getting unexpected 1099s really late in the season is a "thing" now?

And just to make this tax season more amusing, the bank that outsourced her job to India about 2 years ago also managed to deposit money this year into her (closed) 401K account with them that she rolled over 2 years ago.  Got that statement in the mail about the same time as the "late" info from Vanguard.  How on Earth does a bank deposit funds into an account that's been closed for a couple years of an ex-employee?  She gets a statement about it, but it's closed, so she can't do even anything about it directly.  That's probably going to be another multi-hour phone battle to get them to fix their system...  Sigh.

Makes my problems from last year look downright trivial (last year we were into April before I got my last W2 because all the info was digital and the accountant with access went AWOL).  Man do I HATE tax season!

On the plus side, my HSA account (new this year) finally got fixed.  For the first month I had it, the funds that were supposed to go into it were just disappearing (came out of my pay, but never appeared in the HSA account).  Eventually the bank "found" them and got them into my account.  At least those numbers match now so I should be OK for next year's taxes, and luckily I didn't need to spend any money on healthcare in January...

[Retired To Win]

Rushing into doing our tax return has never been my problem. (!)  I am starting to gather my info and outline the return this week, but I intend to do this an hour or so at a time.  Little doses may make it go down better this year.

Good luck with your returns, everyone.

[tallen]

I thought it was federal law that companies had to have all tax documents mailed out by the end of January? Maybe that only applies to w2's?

You can always amend your return if something unexpected comes in late and you already filed too.

[aj_yooper]

Our taxes are way simple this year so we filed already and are expecting a small refund.

[Cpa Cat]

Once you start investing, you need to stop filing early. Filing early works for W-2 earners, but toss some investment income in there and it's time to take some deep breaths and back off.

First of all - there should be no unexpected 1099s from investment companies! You're going to get one for every taxable account you own. If it's not in your hands, then you need to wait.

Second of all, if you invest in REITS or Publicly Traded Partnerships (PPTs), you'll often be the last 1099 to be released. And if you have PPTs, you will often end up waiting on K-1s to boot.

[wuj818]

Now, yet another 1099 rolls in (from Vanguard)!  Some brokerage account thing that we've not had in previous years (and neither one of us are aware of any changes we made that could cause this new mystery account to appear).

Did you upgrade to the combined mutual fund/brokerage account last year?

[DragonSlayer]

Brokerages get until Feb. 15th to send out forms. They're exempt from the "end of January" thing. But even with that, they still get extra time if your situation is "complicated." Yep. Investing pretty much puts a stop to the filing early thing.

[BuildingFrugalHabits]

Yup we just got a second 1099 for our vanguard brokerage account as well.  I believe this is due to the fact that we converted over to their new account structure which combines the mutual fund and brokerage account vs. the old system where they were managed separately.  It took me a minute to figure out why there was an additional form.  I expect to only receive one 1099 for this account next year.

[johnny847]

I was going to send in my tax returns last week, but I was lazy. A couple days ago I got another 1099 from Vanguard. Yay for procrastination!

OP, did you buy any ETFs or convert any mutual funds to ETFs at Vanguard this year?

[geekette]

We already filed and already got our refund.  I've gotten a couple paper 1099's since, but I'm making a rash assumption that they're the same as the ones I downloaded online.  Perhaps I should check, huh.

Honestly, it would be easier if I just waited, but I'm the "git 'er done" type.

[Yankuba]

It is good to send taxes in ASAP in order to make sure identity thieves don't send in a fake return with your information first. I also get PINs mailed to me from the IRS to prevent identity theft.

[cdttmm]

And if you have PPTs, you will often end up waiting on K-1s to boot.

This.

Patiently waiting for the K-1 I need in order to file my taxes.

[Zikoris]

We make a folder with a checklist of every slip we need in January. As we get slips, we enter the information into our tax software and throw the slip in the envelope. When there are no more check boxes left to tick, we file.

Now, we did have a problem last year with one of Celda's banks lying to him saying he wouldn't get or need a tax slip for one of his accounts, which turned out to be wrong and we had to file an amendment (though the bank did apologize profusely and give him a gift card). But it was very little effort, and was fixed in about 5 minutes.

[merula]

I filed early and ended up getting a 1099-INT from my mortgage company because they paid out excess from my escrow account and I didn't even know that earned interest. I owe $7 more than I filed. I'll file an amended return if I get a letter about it. I highly doubt the IRS is going to get really upset over an extra $7.

[bzzzt]

This is part of the reason why I have trended towards owing money over the last couple years. No hurry to give them your money until April 15th. I could adjust my withholding, but if I modified it according to the table on the W4, I would get a $2500 return instead of owing $2500. Why give the government a 0% loan when they can give me one?

[Cpa Cat]

I filed early and ended up getting a 1099-INT from my mortgage company because they paid out excess from my escrow account and I didn't even know that earned interest. I owe $7 more than I filed. I'll file an amended return if I get a letter about it. I highly doubt the IRS is going to get really upset over an extra $7.

That sort of thing will get automatically corrected and they'll send you a bill for any tax due. If you agree with their changes, then you just send a check - no need to amend.

[dunhamjr]

If I was owed a refund I might have filed, but I owe about $4k, so taxes will be sent as late as possible.

[Monkey Uncle]

Brokerages get until Feb. 15th to send out forms. They're exempt from the "end of January" thing. But even with that, they still get extra time if your situation is "complicated." Yep. Investing pretty much puts a stop to the filing early thing.

And even then, they can send you a corrected 1099 later.  Apparently, having to do it by Feb 15 creates such stress that they are likely to make mistakes.  Several times I've gotten corrected 1099s well into March, or even after April 15.  The difference between the original and corrected has always been small, so I've just ignored them.

[BlueMR2]

Did you upgrade to the combined mutual fund/brokerage account last year?

No changes made (on purpose anyways, maybe something magic behind the scenes changed?) in 2014.  Just the normal contributions made.  I *did* make some changes in January of 2015 (in my name).  The mystery 1099 came in the wife's name and says it's for 2014 though.  Very confusing.

It'll get straightened out eventually, but even with professional help tax season always seems to be a ridiculously complicated and stressful time for us.  It's like a magic box where you just have no idea what's going to happen when you poke a button on it.  Sigh.

[Indexer]

The thing is, your taxes are computed based on the income you earned -- not the forms you received.

Even if you received no forms, you could still fully and accurately fill out your tax return, it just might be more work since you have to calculate some things yourself that would normally be on the forms. (In some cases, it can be a lot of work to calculate those things, but it's possible.)

As a practical matter, you normally want to wait until you receive the forms so that your calculations match them, but it's not strictly necessary to wait. If you have to amend your return because of a late-received form, the fault is entirely yours: you failed to disclose income. You should be completing the return based on the income you earned, not based purely on the forms you received.

This!

I actually do my taxes on the first day they allow you to... which is well before I get any forms except the W-2.  Technically you don't even need your W-2, but it does make things easier.  Student loan interest can be found on your student loan statements.  Dividends/capital gains can be found in your brokerage statements.  IRA contributions/Rollovers, etc. can be found online.  If you keep good records you don't need the forms. 

So I normally have my taxes ready prior to the first day of electronic filing and then I file that day.  As I get the forms I make sure everything matches.  The likelihood of an IRS audit because you reported XYZ event but failed to send the extra form is slim, and even if they did audit you... you just mail in the form.

It is good to send taxes in ASAP in order to make sure identity thieves don't send in a fake return with your information first. I also get PINs mailed to me from the IRS to prevent identity theft.

This too.  The IRS accepts the first return assuming it is correct.  The second person to file is the one who gets the stink eye and has to prove it is REALLY them.  If you are first the criminal can't prove they are really you so they don't get a chance to commit fraud.  However if they file first now its your 'responsibility' to prove you are actually you...

[johnny847]

I actually do my taxes on the first day they allow you to... which is well before I get any forms except the W-2.  Technically you don't even need your W-2, but it does make things easier.  Student loan interest can be found on your student loan statements.  Dividends/capital gains can be found in your brokerage statements.  IRA contributions/Rollovers, etc. can be found online.  If you keep good records you don't need the forms. 

Is this actually possible if you have an international fund? What I realized is that for VTIAX (total international index), when Vanguard gives a quarterly (or yearly) statement showing how much you received in dividends, that amount is after foreign taxes were withheld. So for example, my end of year statement shows 196.82 in dividends from VTIAX, but on my 1099 DIV, I have 207.78 in dividends from VTIAX because I had 10.96 in foreign taxes withheld.

I imagine this will be the case for any international fund at any brokerage.

Does Vanguard release foreign tax withheld data before they issue your 1099 DIVs? Because otherwise, you cannot correctly compute your taxes without this information.

[beltim]

This thread has given me several additional reasons not to use Vanguard.  For example, Johnny's comment about foreign taxes paid only showing up on the 1099 and not the year end summary.  Every other brokerage I've used actually reports foreign taxes paid along with every dividend distribution.

[rocketpj]

Not sure if it is different here in Canada, and I don't have any taxable investment accounts (all in RSP and TFSA accts).  But here all the employers and investment types have to have the paperwork to us by the end of Feb/1st week of March.  This year March 2 is the deadline for RSP contributions to be deducted from last year's taxes - the banks used to push interest free or very low interest loans for RSP contributions this time of year but I havent' seen much of that lately.

I usually try to file right away, as we always get substantial returns.  Our income taxes are deducted at source and there isn't a lot I can do to reduce our contributions, but we always have a lot of 'write offs' from RSP contributions, child care and business expenses.  The sooner I file the sooner that money gets back where it belongs and back to work for me (it almost always goes straight into tax sheltered accounts, thus boosting next year's return as well).  So this week is 'doing taxes' time for me.

[LiveLean]

I've been self-employed for 16 years and average about 15-20 1099s a year. All come by Feb. 1. I have a rental property and a separate business outside my sole proprietorship I receive all of the 1099s for. I also get 1099s for investment accounts. I filed my taxes before Valentine's Day for the first time this year. I'm fortunate to be the son of an accountant who has prepared me for his passing for 25 years -- thus I do them myself and he checks them over. He'll probably outlive me, but it's nice to have this skill set, which includes keeping track of everything so there are no surprises, though occasionally there are 1099 errors.

[dragoncar]

Every year I get at least 1 corrected form.  Might as well wait until April, especially since I owe this year (and probably next year too!!)

[RetiredAt63]

I had one more year's worth of RRSP room, and took it since it does help the tax bottom line.  I could have put it on my LOC (I am paying down debt aggressively, so no cash reserves) but Scotiabank had an RRSP loan for prime plus .8% (I think it was that).  I asked at BMO and they were at prime -> 2.85%.  That is much better than the LOC, so I took out an RRSP loan.  It gets the minimum each month until the LOC is done (almost there) and then it will be easy to pay off fast.

But yes, prime is a wonderful interest rate. Of course it works best if you then pay the RRSP loan off fast with the extra refund you got by having an RRSP to start with.  Everyone here knows that  ;-)

Also, it is possible to have an RRSP and a RRIF at the same time.  So when a person retires they can start a RRIF for some retirement income, but they don't have to use all of their RRSP for the RRIF, and can keep putting money into an RRSP as long as they have contribution room. Weird, but useful.

This year March 2 is the deadline for RSP contributions to be deducted from last year's taxes - the banks used to push interest free or very low interest loans for RSP contributions this time of year but I havent' seen much of that lately.

[retired?]

It is good to send taxes in ASAP in order to make sure identity thieves don't send in a fake return with your information first. I also get PINs mailed to me from the IRS to prevent identity theft.

This too.  The IRS accepts the first return assuming it is correct.  The second person to file is the one who gets the stink eye and has to prove it is REALLY them.  If you are first the criminal can't prove they are really you so they don't get a chance to commit fraud.  However if they file first now its your 'responsibility' to prove you are actually you...

Not that it would be a fun experience, but is it hard to prove "you are really you"?

[ash7962]

And if you have PPTs, you will often end up waiting on K-1s to boot.

This.

Patiently waiting for the K-1 I need in order to file my taxes.

Same here, first year waiting on a K-1 form for me.  I remember last year people were waiting for them well into March.  When do you guys usually get your K-1s?  Wondering if my company is super late or if this is normal?

[Cpa Cat]

I don't personally hold PPT's, but I know that when I worked for a bigger firm, our policy was to just extend any return that had PPT K-1's - because they were coming so late that we felt we'd be rushed to finish the individual returns by April 15th. But a lot of those people had 6-12 PPT K-1's they were waiting on.

For regular business K-1's - a total toss-up. I often feel lucky to receive the K-1's I need by March 15th.

[Jack]

I had one more year's worth of RRSP room, and took it since it does help the tax bottom line.  I could have put it on my LOC (I am paying down debt aggressively, so no cash reserves) but Scotiabank had an RRSP loan for prime plus .8% (I think it was that).  I asked at BMO and they were at prime -> 2.85%.  That is much better than the LOC, so I took out an RRSP loan.  It gets the minimum each month until the LOC is done (almost there) and then it will be easy to pay off fast.

But yes, prime is a wonderful interest rate. Of course it works best if you then pay the RRSP loan off fast with the extra refund you got by having an RRSP to start with.  Everyone here knows that  ;-)

Also, it is possible to have an RRSP and a RRIF at the same time.  So when a person retires they can start a RRIF for some retirement income, but they don't have to use all of their RRSP for the RRIF, and can keep putting money into an RRSP as long as they have contribution room. Weird, but useful.

This year March 2 is the deadline for RSP contributions to be deducted from last year's taxes - the banks used to push interest free or very low interest loans for RSP contributions this time of year but I havent' seen much of that lately.

Wow, I had no idea that was a thing. Anybody know why nobody offers the equivalent thing for IRAs here in the States?

[Gevans17]

don't wait too long or someone else will file on your name / SS# and claim your refund!

[AZGUY]

I didn't get my Charles Schwab tax forms until May of last year. Lets hope this year is different.

[AZDude]

I used to filed immediately, but now there are too many sources of income I have to wait for(brokerage accounts, 1099s from side income, etc, etc...). And we have one obscure account my FIL opened for my wife back when she was a young lass(which is fantastic, btw... I'm glad I have a closet-mustachian for a FIL and not some crazed redneck or something) that waits every year until the absolute last day to send out their info. So now every year its well into March before they get filed.

Oh well, definitely not in any hurry this. Will end up owing the state a few hundred bucks. Which is OK, I look it at like the state gave me an interest free loan...

[Million2000]

I can definitely sympathize with the OP. The last couple of tax seasons have been very complicated for me at least given all the new types of income and situations. Last year and the preceding years I was irritated that the tax forms took so long, most coming mid-February. This year, I don't mind it so much since this one will be the first that I actually owe money, instead of getting it back (thankfully no penalties).

All of this has taught me to be very vigilant to moves that generate taxable events, it makes me appreciate the good ole'fashioned days when all I had was a W2 with all my investments in a 401k.   

[JLee]

I just got my last W2 today, but I'm not in a huge rush...I have to figure out how Form 3115 works (recently learned I should've depreciated my house when I was renting extra bedrooms in 2013 and 2014) before I file.

[rockstache]

Once you start investing, you need to stop filing early. Filing early works for W-2 earners, but toss some investment income in there and it's time to take some deep breaths and back off.

I thought this would be the case, because that is what I had always heard, and in 2015 I opened my first taxable investment account. About 2 weeks ago I got my statement from Vanguard for that account. Is there something else I need to wait for?

[Miss Prim]

I usually start plugging away on my taxes online as I get 1099's and other forms in the mail.  But, I usually don't actually file until after April 1st, just because I usually have to pay some taxes.  I never get money back anymore since I really started paying close attention to how much I need to send in quarterly to just about break even.  By plugging away a little at a time, it also makes doing tax returns less onerous.

                                                                                          Miss Prim

[redcedar]

A short list of those items that make me wait and wait to file my tax return:

W-2s and 1099 - so frustrating that some entities wait until Jan 31 to mail. I have found that I can knock off a few days by finding these forms on the entities website.

Brokerage items - they have some extra time

Corrected statements - one every other year is my personal trend. Its not rocket science. Get it right the first time!

K-1s - these can really run late and it seems that they have little reason to be late other than they are allowed to be.

State Govt - these yahoos just can't decide on certain deductions until late in the filing window. Really?

[kimmarg]

Brokerages get until Feb. 15th to send out forms. They're exempt from the "end of January" thing. But even with that, they still get extra time if your situation is "complicated." Yep. Investing pretty much puts a stop to the filing early thing.

I heard a news story that they are finally fixing this but what drives me nuts is our state requires FAFSA by Feb 15. So I needed to file my taxes before this so I can put 2015 data on the FAFSA. I think you can use 2014 data or estimated 2015 data for the FAFSA but given a large change in our tax situation in the past year I wanted to use the 2015 taxes. I guess if we get another 1099 or something we'll file amended. I also *thought* we had everything. Filed Thursday, we'll see!

[nobodyspecial]

In Canada we have to file by end of April but Questrade claim they will send out statements in march-April.
My first year of having investments in taxable accounts so I'm planning to file now based on the monthly statements and then submit a correction - I want my RRSP check back !

[Gen Y Finance Journey]

It took me a second to realize this post was from last year and I was starting to get annoyed that other people had received their Vanguard paperwork already and I haven't! :)

[seattlecyclone]

I did actually receive my Vanguard tax forms already for this filing season. Still waiting on Wells Fargo and Schwab.

[rockstache]

I didn't realize it was from last year. I got my vanguard forms from 2015 last week.

[BlueMR2]

It took me a second to realize this post was from last year and I was starting to get annoyed that other people had received their Vanguard paperwork already and I haven't! :)

This year has been much better.  Unless I've overlooked something, I *already* have them all except for Vanguard and ADP...

[johnny847]

I did actually receive my Vanguard tax forms already for this filing season. Still waiting on Wells Fargo and Schwab.

So one quirk about Vanguard. If your account isn't an upgraded account where you can have mutual funds and stocks/ETFs in one account, and instead have two accounts, one for mutual funds and one as a brokerage account, then Vanguard will release the tax forms for those accounts at different times.

I was affected by this last year. I was ready to file but put it off for a while. And then Vanguard sent me a 1099-DIV for my brokerage account holdings. One instance where procrastination paid off! Haha

[Tami1982]

We already filed and already got our refund.  I've gotten a couple paper 1099's since, but I'm making a rash assumption that they're the same as the ones I downloaded online.  Perhaps I should check, huh.

Honestly, it would be easier if I just waited, but I'm the "git 'er done" type.

I'm the same way.  But my stuff is really simple too.  How long was the turn around your on your refund?

[geekette]

We already filed and already got our refund.  I've gotten a couple paper 1099's since, but I'm making a rash assumption that they're the same as the ones I downloaded online.  Perhaps I should check, huh.

Honestly, it would be easier if I just waited, but I'm the "git 'er done" type.

I'm the same way.  But my stuff is really simple too.  How long was the turn around your on your refund?

This was last year, mind you, but I believe it was less than two weeks.

[Debts_of_Despair]

I actually do my taxes on the first day they allow you to... which is well before I get any forms except the W-2.  Technically you don't even need your W-2, but it does make things easier.  Student loan interest can be found on your student loan statements.  Dividends/capital gains can be found in your brokerage statements.  IRA contributions/Rollovers, etc. can be found online.  If you keep good records you don't need the forms. 

Be careful with that.  My wife had the last 5k of her loans forgiven last year.  According to the last statement, I had paid  about $150 in interest for the year.   When I got the 1098 it was actually around $2600.  The interest must have been capitalized at some point but there was no way for me to see that.  It saved me hundreds on my return.

[BTDretire]

Last year I got my taxes done on Mar 27, I returned the E-signature form on Mar 31 at about 2:30. When I got home,
I checked the mail and found an amended 1099. I called the tax man, and said don't e-file that yet, I received another form.
It was to late, they already did. I had to do an amended tax form, and pay an extra $63. Tax man didn't charge me.
I'm scheduled for the first week in April this year!

[fattest_foot]

It is good to send taxes in ASAP in order to make sure identity thieves don't send in a fake return with your information first. I also get PINs mailed to me from the IRS to prevent identity theft.

This too.  The IRS accepts the first return assuming it is correct.  The second person to file is the one who gets the stink eye and has to prove it is REALLY them.  If you are first the criminal can't prove they are really you so they don't get a chance to commit fraud.  However if they file first now its your 'responsibility' to prove you are actually you...

Not that it would be a fun experience, but is it hard to prove "you are really you"?

I've had coworkers that had someone file taxes under their SSN. It's apparently an absolute nightmare. The one I remember best didn't get resolved until around November or December of that year, with what sounded like weekly calls to the IRS.