2016 Tax Information Guide - What You Should Know
Consolidated 1099 Tax Statement Mailing Dates
Baird will process the 2016 Consolidated 1099 Tax Statements1 in three waves.
|Mailing Date in 2017||Accounts Included:|
|Wave I||February 15||Accounts holding securities (e.g., equities, many types of bonds or early reporting mutual funds) that do not require year-end tax information adjustments.|
|Wave II||March 1||Accounts holding securities (e.g., exchange-traded funds, mutual funds, real estate investment trusts) that require year-end tax information adjustments or reclassifications.|
|Wave III||March 152||All accounts not included in Wave I or Wave II.
Generally, accounts holding Real Estate Mortgage Investment Conduits (REMICs) or Widely Held Fixed Investment Trusts (WHFITs), or securities that have late reporting reallocations (e.g., unit investment trusts) will receive a consolidated Tax Statement mailed in Wave III.
Tax Statement Downloads
The date you receive your Tax Statement depends on the holdings in your account. Deadlines have been extended into 2017 for a number of investment products providing post year-end tax adjustments to Baird. This may include debt instruments, exchange-traded funds, mutual funds and unit investment trusts.
Due to this extension, we will be mailing our Tax Statements in Waves. We anticipate the majority of Tax Statements will be mailed on or before February 15 (in Wave I). Certain Tax Statements will not be mailed in Wave I if Baird has not received year-end tax information adjustments prior to the processing deadline. This includes exchange-traded funds, mutual funds, real estate investment trusts and unit investment trusts.
Tax Statements not mailed in Wave I will be mailed in Wave II if year-end tax information adjustments have been processed prior to the Wave II mailing deadline of March 1. All remaining Tax Statements will be mailed in Wave III by March 15. Generally, accounts holding real estate mortgage investment conduits (REMICs), widely held fixed investment trusts (WHFITs) and/or securities that have late reporting allocations (e.g., unit investment trusts) will receive a consolidated Tax Statement mailed in Wave III.
Note: As applicable, the Consolidated 1099 Tax Statement mailed on February 15 will contain an important message indicating if you have a related account(s) in your household that will be mailed in a future Wave. Please wait until you receive all 2016 Tax Statements to file your income tax return(s).
Reminder: A 2016 Tax Statement will be issued if you received dividends or interest totaling at least $10 in aggregate, or if you received any gross proceeds3.
Tax Document Delivery Requirements
During the 2016 tax season, Baird will issue various tax documents, including the Consolidated 1099 Tax Statement, to clients based on the type of account and the activity within the account. A hard copy of the applicable tax forms will be mailed via the United States Postal Service (USPS) to each client by the IRS due date. The table below illustrates the deadlines that each tax form must be mailed by. As always, Baird will work to mail out tax forms as soon as year-end tax information adjustments have been processed.
|Tax Form||Form Detail||
IRS Due Dates in 2017
|Form 1099-R and 1099-Q||Distributions from IRA, retirement account and/or Education Savings Account||January 31|
|Form 1097-BTC (annual/cumulative recap)||Required for certain tax credit bonds||February 15|
Consolidated 1099 Tax Statement (Form 1099-DIV, 1099-INT, 1099-OID, 1099-B, 1099-MISC)
Reportable dividends and other distributions; Reportable interest income; Original issue discount interest accretion (not paid); Report the sale of stocks, bonds, mutual funds, and other securities; Reportable Miscellaneous Income, Real Estate Mortgage Investment Conduit/Widely Held Fixed Investment Trust
|Form 1042-S||Foreign person’s U.S. source income subject to withholding||March 15|
|Form 2439||Notice to Shareholder of Undistributed Long-Term Capital Gains||March 31|
|Form 5498-ESA||Reports Coverdell Education Savings Account (ESA) contributions and rollovers||May 1|
|Form 5498||Reports total annual contributions to an IRA||
Convenient Access to Your Tax Documents
Baird offers a variety of methods to access your tax documents (in addition to the copy received in the mail) including:
- Baird Online – a PDF copy of your tax documents will be available on Baird Online before your copy is received in the mail. A Baird Online user ID and password is required to access your tax forms. Click here to register for Baird Online.
- TurboTax® – you can download the Tax Statement and/or Form 1099-R directly into TurboTax®. Click here for information about the TurboTax® download.
- CSV File – you (and your tax preparer) can download the Tax Statement into a CSV (comma-separated value) file when the tax document is received. The CSV file can then be electronically transferred into most professional tax accounting software. Click here for Instructions to download the Baird Tax Statement into a CSV file.
Cost Basis Legislation – What You Should KnowCost Basis Legislation that began in 2011 requires Baird to report adjusted cost basis to the IRS on Form 1099-B (Gross Proceeds) when Covered securities are sold, redeemed or exchanged in taxable (i.e., reportable)1 accounts.
The final phase of CBL was implemented in 2016 and now includes complex debt. Complex debt acquired on or after January 1, 2016, is considered a Covered security and Baird will report cost basis to the IRS. Equity securities, mutual funds and dividend reinvestment plans, simple debt and options that were Covered securities in 2011, 2012, 2013, 2014 and/or 2015 continue to be Covered securities in 2016 and thereafter
Cost basis and the applicable adjustments are an important part of accurately reporting capital gains and losses when filing income tax returns because they directly impact your taxable income. Your income tax return(s) must reflect the amounts Baird reports on your tax statements since the IRS will compare your income tax return to what is reported by Baird. You should reconcile any differences and maintain supporting documentation accordingly.4
Please read "Cost Basis Legislation – What You Should Know" for additional information.
3A 2016 Consolidated 1099 Tax Statement will be issued if your taxable account meets or exceeds any of the IRS minimum thresholds as follows: (a) $10 or more of dividends, capital gain distributions, nondividend distributions, corporate interest, treasury interest, tax-exempt interest/dividends, original issue discount, treasury original issue discount, market discount or substitute payments, (b) $600 or more of any cash liquidation distributions, royalty distributions or other income distributions, (c) at least one gross proceeds transactions, (d) any federal backup withholding, (e) any state withholding, or (f) any foreign tax paid.
4There may be instances when the information you report to the IRS differs from the information reported by Baird. You must be familiar with tax return reporting rules and be able to verify the differences. Wash sales are an example of a transaction that may cause differences between information reported to the IRS by Baird. You are not allowed to claim losses when reporting wash sales, though the disallowed amount must be reported to the IRS. Baird will identify wash sales within a given account, but it is your responsibility to identify wash sales that are a result of trades within different accounts at Baird or other financial institutions where you hold accounts. All gains from wash sales are also reported to the IRS.