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Tax Forms

Tax Forms From Investment Accounts

Tax Forms From Investment Accounts

Investing will generally have tax consequence.   Humorist Will Rogers once said "The only difference between death and taxes is that death doesn't get worse every time Congress meets."  

While we may not desire taxable income, it is good to remember that profits will generate tax consequence, while losses do not.

For tax-qualified retirement accounts, the tax is deferred until assets are withdrawn.  Distributions may result in reportable taxable income, unless qualified charitable distributions are utilized.  

For retail, non-retirement accounts, there may be tax consequence each year, or deferral until assets are sold, but will create tax consequence when there is profit.

A summary of the tax forms you may receive relating to your investment accounts is below:

Tax Forms For Retirement Accounts

Form 1099R

  • Form 1099R reports distributions from retirement accounts, such as 401(k), 403(b), 457(b), IRA, Roth, SIMPLE IRA, SEP and other tax-qualified retirement plans.
  • Distributions may be paid to the account holder or rolled over to another type of retirement plan, such as a 401(k) to IRA rollover.
  • Box 2a shows the taxable amount.  
  • For example, a 401(k) plan rolled to an IRA will produce form 1099R.  A rollover example: If the balance was $100,000 and the entire amount is rolled over, box 1 will show $100,000 while box 2a will show $0, as the account was rolled over and is not subject to current taxation.   A distribution example:  If the balance in the account was $100,000 and the entire amount is distributed to the owner, both box 1 and box 2a will show $100,000.  Amounts subject to income tax will show in box 2a.
  • These forms must be mailed by January 31. 
  • Your December account statement also serves as a substitute Form 1099R, notifying the IRS of the December 31 account value of all IRA accounts.

Form 1099 Codes:

1 - Early distribution, no known exception

2 - Early distribution, exception applies

3 - Disability

4 - Death

5 - Prohibited Transaction

6 - Section 1035 exchange

7 - Normal Distribution

8 - Excess contributions plus earnings/excess deferrals taxable in current tax year

9 - Cost of current life insurance

A - May be eligible for 10 year tax option

B - Designated Roth account distribution

C - Reportable death benefits under 6050Y


D - Annuity payments from certain annuities and life insurance that may be subject to tax under 1411

E - Distributions from EPCRS

F- Charitable Gift Annuity

G - Direct Rollover and direct payment

H - Direct rollover of designated Roth account to a Roth IRA

J - Early distribution from a Roth IRA

K - Distribution of Traditional IRA assets without readily available FMV

L - Loans treated as deemed distributions

M - Qualified plan loan offset


N - Recharacterized IRA contribution for current year

P - Excess contributions/deferrals plus earnings taxable in current year

Q - Qualified distribution from Roth IRA

R - Recharacterized Roth IRA contribution for current year

S - Early distribution from SIMPLE IRA in first 2 years

T - Roth IRA distribution, exception applies

U - Dividends distributed from ESOP under 404(k)

W - Charges or payments for qualified long-term care under combined arrangements


Form 5498

  • Form 5498 is submitted to the IRS by the trustee or issuer or your Individual Retirement Account (IRA), Roth IRA, SIMPLE, or SEP account.
  • Form 5498 reports contributions, Required Minimum Distributions and the Fair Market Value of the account.   A rollover from an IRA to an employer sponsored retirement plan, such as a 403(b), 457(b), or 401(k) plan to an IRA.
  • These forms are mailed in the middle of May. 
  • The taxpayer does not need to send copies of Form 5498 to the IRS, the trustee or issuer of your IRA reports these to the IRS directly.

Tax Forms For Non-Retirement Accounts / Currently Taxable Investments

Retail investment accounts that a not part of a tax-qualified retirement plan, such as Individual, Joint, Transfer On Death, UGA and Trust accounts, are reported each year on a Consolidated Tax Report (CTR).  CTR reports include 3 separate tax documents in one convenient packet:

  • Form 1099B - reports sales or distributions paid
  • Form 1099DIV - reports realized capital gains and dividends
  • Form 1099INT - reports interest earned


  • The IRS published mailing deadline for these is February 15th.  The IRS allows firms issuing Consolidated Tax Reports the ability to request a 30-day extension, moving the deadline to March 15th.
  • Lincoln Investment waits for mutual fund companies to certify the results contained within the tax forms.   This certification allows taxpayer to rely on the information in their form when completing their tax return.  Uncertified results may change materially.  If the tax computed based on an uncertified 1099 forms and the certified results vary, the taxpayer would need to file an amended return if the computed tax changes by $10 or more.
  • Consolidated Tax Reports are expected to be certified by March 15th and will be provided sooner if available.
  • Commonly, investments that hold real estate, small cap stock and international fixed income instruments take longer to obtain certified results, as calculating the return on principal and auditing those results is time-consuming and complex.
FAQ

FAQ

Where do I locate my tax forms?

-You may access your account to view your tax forms for your Lincoln Investment accounts.  Lincoln Investment will mail 1099R forms by January 31st, and Consolidated Tax Reports by March 15th.

Isn't there a deadline to send tax forms?

-Yes, for retirement account forms, like Form 1099R, the IRS deadline is January 31st.  For non-retirement accounts, the IRS deadline is February 15th or March 15th with an extension.   The IRS doesn't begin to accept tax returns until mid to late January.   

I have a partnership and my tax return due date is March 15th.  I don't have my 1099 yet.  What should I do?

-Ask your tax professional if filing an extension is right for you.  Waiting for certified results of your Consolidated Tax Form will save later potentially having to file an amendment to your return. 


I rolled over my 401(k) to an IRA, why am I getting a Form 1099R?

-In this example, the Form 1099R is to report to the IRS that you rolled your assets from an employer sponsored 401(k) to an IRA.  Box 1 of the Form 1099R shows the amount of the distribution, while box 2A shows the taxable amount.  If all assets were rolled over, box 2A should read $0, meaning the rollover was tax-deferred and not currently taxable.  The IRA company will provide form 5498 to the IRS confirming the  amount of the rollover.

Should I give my tax professional all of my forms?

-Yes, we recommend providing all tax forms to your tax professional.  Form 5498 is not required to be filed.

Will you send my tax forms to my tax professional?

-No.  Your confidential information is included in your tax form.  Release of your private information to a third party is a risk that we may not assume.  We take great effort to preserve the security and confidentiality of the information you entrust to us.  The investment custodian will mail the form to you, it is available in your account access secure login, and we may provide the form to you upon request.  Please provide your tax forms along with the other information your tax professional requests.

Who produces the tax form(s)?

-The investment custodian is responsible for producing the tax forms.  Many custodians hire vendors to assist with this process.  Knox Financial Services does not produce tax forms for investment accounts.

I didn't get a tax form for my accounts.  Should I have received one?

-For non-retirement accounts, you should expect a Consolidated Tax Report each year.  For tax-qualified accounts, if you did not rollover any funds or take a distribution or withdrawal, no Form 1099R will be produced.  If you are unsure whether your investment accounts generated a current tax form, please contact our Client Service Team.

Important Information

This summary of tax forms is provided for informational use only and should not be used for preparation of your tax return.  Income tax is complex.  A qualified tax professional may assist you with determining your overall income tax liability.  Consult your attorney, accountant, or tax advisor for your specific situation.   Tax, legal, or social security claiming services are not offered through or supervised by Lincoln Investment or Capital Analysts.