Introduction to tax reporting communications and resources

Introduction to tax reporting communications and resources

Schwab creates various tax reporting communications and notices for end-clients and advisors throughout tax season.

End-clients may receive the following communications:

  • Tax reporting notices located on SchwabAlliance.com.
  • Email and Message Center alerts, in addition to push notifications through the Schwab Mobile App (if notification preferences are enabled) when tax documents are available online.

Advisors can access tax newsletters, guides, sample forms, and more.

To aid end-clients in tax preparation, Schwab provides the following notices.

NoticeOnline availability dateWho receives it Description
Important Tax Year InformationWhen the December statement becomes available the beginning of January.All clientsIncludes tax-related information for retirement accounts, and a description of common tax forms investors may receive.
How to Read Your 1099 Composite and Year-End Summary ReportWhen the initial Form 1099 Composite becomes available in February.Clients who receive Form 1099 CompositeProvides highlights of the Form 1099 Composite and answers to frequently asked questions.
Important Tax Information About 367(a) TransactionsWhen the initial Form 1099 Composite becomes available in February.Clients who held a stock affected by a 367(a) transaction during the tax yearProvides information related to U.S. corporations re-domiciling offshore, and Schwab's policies for reporting the event.
Widely Held Fixed Investment Trust (WHFIT) reporting requirementsWhen the initial Form 1099 Composite becomes available in February.Clients who held a security classified as a WHFIT during the tax year Provides information related to WHFIT reporting, and the likelihood the client will receive a corrected tax form.
Supplementary Tax Information for Schwab fundsWhen the initial Form 1099 Composite becomes available in February.Clients who held Schwab funds during the tax yearProvides U.S. government obligation information, the percentage of income earned by state and U.S. territory, and the percentage of income subject to the federal alternative minimum tax (AMT) for Schwab funds.

To assist advisors, Schwab provides various guides for cost basis and tax reporting. During tax season, Schwab publishes Tax Prep Tips, a monthly tax newsletter for advisors.

ResourceDescription
Cost Basis: A Comprehensive Guide for Schwab Advisors

Includes information related to Schwab reporting and regulatory rules for:

  • Accounting methods
  • Transferring cost basis
  • Stepping Up cost basis to date of death
  • Corporate actions processing
  • Tax reporting for fixed income securities
  • Wash sale reporting
  • Gifts
  • 1099 tax form reporting
  • Equity award plans
  • Options reporting
  • Short-sale reporting
Tax form reporting

Provides detailed information for the tax forms listed below, including eligible account types, mailing dates, frequency of corrections, and what is reported.

  • Form 1099 Composite (includes Forms 1099-DIV, 1099-INT, 1099-MISC, 1099-OID, 1099-B and the Year-end Summary report)
  • Substitute Form 1099-OID (REMIC)
  • Standalone Form 1099-MISC
  • Form 1099-NEC
  • Form 1042-S
  • Puerto Rico 480 Series (Forms 480.6A, 480.6B, 480.6C, and 480.6D)
  • Schedule K-1
  • Form 990-T
  • Form 2439
  • Form 1099-C
Form 1099-B reporting scenariosProvides an explanation of the most commonly questioned transactions reported on Form 1099-B.
Implications of Return of Capital (ROC)Includes the basics of ROC, an example of income reclassified to ROC, and information included in the Return of Capital report.
Form 990-T reporting – Assisting your clientDetails how you can assist your client when they receive a Schedule K-1 for a partnership position held in a retirement account at Schwab.
B Notice lettersDetails why your client may have received a First B Notice, Second B Notice, or a Custodian B Notice on their account and how you can assist them.
Tax Prep Tips newsletter

Monthly newsletter produced during tax season providing tax resources for both advisors and end-clients.

For links to the latest edition of the monthly newsletter, monitor Schwab Advisor Center® (SAC) bulletins from November (of the tax year) to April (of the following year).

Tax Prep Tips:

To aid end-clients in tax preparation, Schwab provides the following resources.

 

ResourceDescription
A Guide to Your Schwab Tax Forms

Provides basic information for the tax forms listed below to assist the client in preparing their tax filing as well as a section of frequently asked questions.

  • Form 1099 Composite
  • Retirement and Education tax forms, including Form 5498, Form 5498-ESA, Form 1099-R, and Form 1099-Q
Cost basis facts for stock plan participantsProvides tax reporting guidance to participants of a company's stock plan program and/or employee stock purchase plan (ESPP).

Set proper client expectations for tax-related deadlines using the timeline guides below. Prepare for tax season by viewing sample forms and reports.

Timelines
Sample forms and reports

The following websites can assist you and the end-client during tax season.

Cost basis reporting requirementsCost basis legislation documents
Tax reporting requirementsInternal Revenue Service tax forms publications
Partnership listing for Schedule K-1 forms
Locating tax factors for mortgage-backed securities
Taxability of municipal bond positions (view the official statement of the bond)Electronic Municipal Market Access (EMMA)

Introduction to account type tax reporting
Introduction to tax forms
Introduction to tax forms production
Introduction to tax information files
Introduction to tax reporting alerts
Introduction to the Account Summary Report and the Year-end Gain/Loss Report

If you have questions about cost basis reporting, statement preferences, and tax reporting, contact your service team or call Advisor Services Cost Basis Service Tooltip at 877-762-6446.