Home » FILING YOUR TAX RETURN (Page 22)

Category Archives: FILING YOUR TAX RETURN

Finally a Tax Law Change That Will Make Our Lives Easier. Well, unless you are a stock broker or mutual fund company that is. 1099-B Reporting Expanded

October 12, 2010 3:02 pm / Leave a comment

Mutual fund

Mutual Fund

Stacie says: Good news for taxpayers who receive Forms 1099-B Broker and Barter Exchange Transactions.  Starting in 2011, these forms will include the cost or other basis information of stock and mutual fund shares sold or exchanged during the year.  I can’t tell you how happy this makes me.  Countless hours are spent each year by preparers and taxpayers alike trying to find the basis information on stock sales.  I have to say that this law change falls within one of my more favored.

WASHINGTON —  The Internal Revenue Service today issued final regulations under a law change that will require reporting of basis and other information by stock brokers and mutual fund companies for most stock purchased in 2011 and all stock purchased in 2012 and later years.  The reporting will be to investors and the IRS. This additional reporting will be optional for stock purchased prior to these dates.

“This important reporting change means investors will now receive the information they need to more easily and accurately report their gains and losses,” said IRS Commissioner Doug Shulman. “We will continue to work closely with stakeholder groups to ensure a smooth implementation of the new requirement, which reduces the recordkeeping and paperwork burden for millions of taxpayers.”

These regulations, posted today in the Federal Register, implement a provision in the Energy Improvement and Extension Act of 2008.  Among other things, the regulations describe who is subject to this reporting requirement, which transactions are reportable and what information needs to be reported. Besides providing numerous examples, they also adopt a number of comments and suggestions received since the proposed regulations were issued last December.

Form 1099-B, Proceeds from Broker and Barter Exchange Transactions, long used to report sales prices, will be expanded in 2011 to include the cost or other basis of stock and mutual fund shares sold or exchanged during the year. Stock brokers and mutual fund companies will use this form to make these expanded year-end reports.   The expanded form will also be used to report whether gain or loss realized on these transactions is long-term (held more than one year) or short-term (held one year or less), a key factor affecting the tax treatment of gain or loss. The expanded form, to be first used for calendar-year 2011 sales, must be filed with the IRS and furnished to investors in early 2012.

The IRS today also announced penalty relief for brokers and custodians for reporting certain transfers of stock in 2011.

The relief is described in Notice 2010-67, which was posted today on IRS.gov.

Related Articles

The IRS Announces: No More Paper Coupons It’s Time to Learn How To Use EFTPS

September 16, 2010 9:28 am / Leave a comment

Treasury Department official, surrounded by pa...

Image via Wikipedia

Stacie Clifford Kitts, CPA

It’s time for those taxpayers who are fighting the electronic age to step it up.  The IRS today issued proposed Regs to discontinue the use of paper coupons as early as next year.  If you try to send in a paper coupon after December 31, 2010, there wont be anyone at the Treasury Department to process it.  More information about the proposed Regs is presented below:

Proposed Regulations Expand the Use of Electronic Payment System and Discontinue Paper Coupons Next Year

Consistent with a Financial Management Service initiative announced in April of this year, the IRS today issued proposed regulations to significantly increase the number of electronic transactions between taxpayers and the federal government.

The proposed regulations (REG 153340-09) would eliminate the rules for making federal tax deposits by paper coupon because the paper coupon system will no longer be maintained by the Treasury Department after Dec. 31, 2010.  The proposed regulations generally maintain existing rules for depositing federal taxes through the Electronic Federal Tax Payment System (EFTPS).

Using EFTPS to make federal tax deposits provides substantial benefits to both taxpayers and the government.  EFTPS users can make tax payments 24 hours a day, seven days a week from home or the office.

Deposits can be made online with a computer or by telephone.  EFTPS also significantly reduces payment-related errors that could result in a penalty.  The system helps taxpayers schedule dates to make payments even when they are out of town or on vacation when a payment is due.  EFTPS business users can schedule payments up to 120 days in advance of the desired payment date.

Information on EFTPS, including how to enroll, can be found at EFTPS website or by calling EFTPS Customer Service at 1-800-555-4477.

Some businesses paying a minimal amount of tax may make their payments with the related tax return, instead of using EFTPS.  More details regarding taxes required to be deposited using EFTPS, dollar thresholds and other specific requirements are in the proposed regulations.

Additional Information:

  • Publication 4132, which explains the process of enrolling and paying via the Internet
  • Publication 966, The Secure Way to Pay Your Federal Taxes for Businesses and Individuals
  • Publication 4169, Tax Professional Guide to Electronic Federal Tax Payment System
  • Publication 4320, EFTPS Toolkit, which contains PDF(s) and descriptions of EFTPS educational materials and their intended target audience, and is for use by tax professionals and financial institutions to assist in educating their clients on the benefits of EFTPS.
  • Publication 4275, Express Enrollment for New Businesses
  • Electronic Payment Options Home Page
    • Related Articles

    Post navigation

    ← Older posts Newer posts →