Oh tax season! Everyone’s favorite time of the year. When the calendar turns to February, I often get questions from clients asking when they can expect to receive their 1099s. Since the question keeps coming up, let’s revisit some 1099 basics and when you can expect to receive yours!

What is a 1099?

A 1099 is a tax form that reports various types of non-employment income to the IRS. Since non-employment income can take many forms (rent, independent contractor earnings, dividends, interest, capital gains, IRA distributions, etc), there are quite a few different 1099 forms.

Will I receive 1099s?

The answer, as is usually the case, is that it depends. If you had non-employment income over certain thresholds, you will be sent a 1099. The threshold varies by income type. For instance, independent contractors will be sent one if they made over $600 from any one customer. Landlords will receive them for any level of rent payments. Deposit holders will get one for interest income. Mortgage holders will get one for interest paid. Investors get a 1099 for any level of investment-related income.

Does the IRS get copies of 1099s?

They sure do. And based on some experiences clients/friends have had, there is an automated system in place to compare reported earnings against 1099 totals. So it’s essential you collect all your 1099s and report income appropriately on your tax return (as well as ensure that any 1099s sent to you with improper totals are corrected).

When will I get my 1099s?

The deadline for issuers to send 1099 varies by format. Many (including 1099-NEC for contractor payments and 1099-R used for IRA distributions) need to be sent by January 31 so you should already have those on hand. However, some (like the 1099 Composite that broker dealers issue to cover dividends, interest and capital gains) are not due until the end of February. Many broker dealers (Schwab included) publish detailed timelines on their websites for when these forms will be sent and nowadays, they even provide customized dashboards with receipt dates specific to your accounts, their structure, and related activity. In short, please consult your custodian’s website for detailed timing on your specific 1099s. (As it relates to Schwab, they have staggered 1099 delivery dates. For accounts with mutual funds and ETFs only, those 1099s are likely already posted. For accounts with individual equities, Schwab has delayed delivery until February 28th to avoid revisions (see below))

Why do I get revisions?

1099s publish data provided by other entities – in the case of a 1099- Composite, broker dealers are compiling data from every stock, mutual fund, ETFs, bond, etc. If that underlying security issuer makes an error in their reporting and corrects it, all impacted 1099s will be amended. In many cases, the differences are small but it’s always wise to compare totals in any revised 1099 and work with your tax advisor on whether you need to amend (if you have already filed your return). As noted above, custodians may delay the issuance date for 1099s to avoid restatements

Hope this is helpful. Keep your eyes peeled for your 1099s and remember – file your taxes or get your information to your accountant as soon as you are able!