Filing Taxes Early Can be a Mistake
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An article in yesterday’s Wall Street Journal discusses the problem of financial services firms providing late or amended Forms 1099. These forms, which show the amounts of interest, dividends and capital gains attributable to each investment account, are necessary for preparation of one’s income tax returns. Both Wachovia and Morgan Stanley have obtained extensions from the IRS to file their 1099s, which will now be issued sometime in February. In recent years, the amount of amended 1099s issued after the January 31 deadline has also increased.
The problem is that if you file too early, you may later receive a late or amended 1099, which would generally necessitate filing an amended return.
If you use a CPA or tax service you may not have much control over when your return is prepared, but if you can do so, it probably makes sense to wait until March to file your returns, especially if you are a Wachovia or Morgan Stanley client.
