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Green street signs against a blue sky with white clouds. One sign reads "TAX SEASON," and the other sign, hinting at a necessary tax review, reads "AGAIN.

Tax Review- Are You Prepared?

Once again, the inevitable April 15th tax deadline is approaching. Take some time to consider how the following items may apply to your tax situation before submitting your 2020 return. A quick tax review could save you money.

Tax Review Checklist

Consider the impact of the following before filing your taxes.

  1. Realized Gains & Losses

Form 1099-B reports your gains and losses for the year. This comes from your account custodian (Schwab, Fidelity, National Advisors Trust, TD Ameritrade). The Form 1099-B will include cost basis and sales proceeds for transactions in taxable accounts.

  1. Custodian-issued 1099s

If your custodian-issued 1099s have not yet arrived in the mail or been posted online as of today’s date (February 11, 2021), you can expect to receive your 1099s in the upcoming weeks.  Generally, custodians begin producing and sending 1099s between early February and mid-March.

  1. Corrected 1099s

Complex tax laws related to dividend and capital gain distributions have resulted in more corrected 1099s, and many reporting agencies take advantage of a 30-day extension. That said, the first 1099 you receive may not be your last. Consider a short delay in filing your taxes to account for this possibility and avoid the extra expense and hassle of amending your returns later. Revised forms may not come until mid-March.

  1. Contributions to 529 Plan accounts

If you contributed to a 529 plan in 2020 for a child, grandchild, or another family member, you may also qualify for deductions or tax credits on your state tax return. This benefit is often overlooked, even though many states encourage college savings in this manner.

  1. IRA contributions

Did you contribute to a traditional IRA account in 2020? If so, confirm that you deducted the contribution. If you did not contribute and if you meet specific qualifications, you can still consider making a contribution until this year’s filing deadline of Thursday, April 15th.

  1. Non-Deductible IRA contributions/Roth IRAs

Did you make a non-deductible contribution to your traditional IRA? If so, make sure you or your tax preparer file Form 8606 to track the cost basis of the IRA account. This filing would also be required if you had non-deductible contributions that you converted to a Roth IRA in 2020.

  1. Charitable gifts

Those who itemize deductions can deduct gifts of cash and/or securities (stocks or mutual funds) that were made to qualified charitable organizations in 2020.  For those taking the standard deduction, a special CARES Act provision allows taxpayers an above-the-line deduction for charitable gifts of up to $300 on their 2020 tax returns.
As always, your SYM team is available to assist in the strategy and implementation of your overall wealth plan and to answer any questions that arise during a tax review or filing.  If you do not yet have a financial advisor, call us at 800-888-7968 or visit sym.com.

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