I want my tax return done! I need that 1099! I need that K-1! I'm supposed to have that all in January! Right?
This can be a frustrating time for taxpayers expecting tax refunds. It's worse than usual this year, as many of the information returns -- W-2s, K-1s, 1099s -- are coming in later than usual. What's the hangup, and when am I supposed to have them?
W-2s should be issued by the end of January.
If you don't have them yet, it's time to be concerned.
Most 1099 forms should be issued by the end of January.
If you worked in 2011 as an independent contractor, you should have your 1099-MISC by now. You should probably have 1099-INTs for interest from your bank in hand. Less happily, if you settled a debt for less than face, you should have a 1099-C.
This year it's different for 1099s from stockbrokers.
A tax law change requires them to report cost information on stock sales starting this year. That has required massive upgrades to the information systems at the brokerage houses, so their deadline was moved back to February 17. Many brokers have received permission to issue 1099 forms as late as March 15.
The delay for stockbrokers also delays returns that need 1099-Bs from the brokers. Many trusts can't issue their K-1s until they have the 1099 information, for example. Investment partnerships also need their 1099s before they can issue K-1s to their owners. Even many S corporations with investment accounts are on hold until they get the 1099s.
K-1s -- information returns from partnerships, S corporations and trusts -- don't have a January 31 deadline.
These forms only are due when the underlying returns that generate them are due. S corporation returns are due March 15, and trust and partnership returns are generally due April 17 -- and they all can be extended automatically to September 15.
If your business has to issue K-1s, don't take the March and April deadlines lightly.
Even though they can be extended. Irate owners and beneficiaries want their forms, of course. And if you do have to extend, make sure you really extend. You need to file Form 7004 to get the automatic extension. If you don't extend and you file late, the IRS assesses a penalty of $195 per month or part-month for each K-1. That means missing the March 15 extension deadline by one day for a 10-shareholder S corporation means a $1,950 penalty.
Extensions can be filed electronically. If you must file them on paper, be sure to use certified mail, return receipt requested, or an authorized private delivery service that delivers to the IRS service center street addresses.
- Joe Kristan