1099B Equals Messy Tax Season Ahead
At the same time period, Viera also counsels Miami Accounting Services to look forward to the next two phases of the law and adjust their bookkeeping and communications techniques accordingly. For the 2012 tax year, brokers will be asked to report cost-basis data with regard to mutual funds, dividend reinvestment plans and most exchange-traded funds acquired with or after Jan. 1, 2012. The 2012 rules apply just to ETFs that are designated as a regulated investment company, and also RIC.
Other ETFs that are designated as corporations will be included in the 2011 rules, while still other classes may be exempted entirely, though the Treasury Department has broad authority to expand the asset classes covered within the statute.
In 2013, the reporting requirements will expand to include fixed income and options. The IRS is still in the way of drafting the rules for the third phase, and comes with yet to issue some sort of notice of proposed rulemaking, the first formal step in this regulatory process. Viera's Miami Accounting Service began its education campaign to the legislation around December 2010, but has recently been ramping up its outreach to advisors as the tax season draws more detailed.
We've been since July really I’d say spoon-feeding experts information, Viera claimed. That month, the firm published a whitepaper to the rules, and has since been engaged in a variety of outreach and education efforts to enhance awareness of the modifications and help advisors plan for the coming storm. There’s no question that there’s going being a lot of confusion, Viera said. If you’re not geared up, you’re in an eight-week trench - easily - that will not only be pretty.
Viera said that the CPA's works together with are all over the map with regard to their level of preparedness for the new rules, with some still unclear on basic issues which include which lots are covered, while others have definitely reached out to people and implemented training programs for their staffs, with some taking choosing additional personnel to facilitate practise.
Even for CPA firms that have already reached out to their clients, though, Viera is suggesting that it would be worthwhile to issue some sort of reminder ahead of this mid-February deadline for delivering 1099 forms. Then all over again, the CPA firm acknowledges that each advisor practice has a unique client base, so there's no one-size-fits-all communications strategy. Viera recommends that agencies place their clients within two buckets- people prepare their own income taxes, and those who enlist a CPA, and target their outreach accordingly.
Brokers should expect you'll field a sizable level of questions from CPAs, who, while a professional class steeped in tax law, are still going to stay the position of being required to negotiate a completely redesigned 1099-B form, according to Viera.
We're preparing for the worst, he claimed. Maybe this is going to be Y2K - practically nothing happens, and we've done almost the entire package preparation. Miami Accounting