Tax Season Timing Matters: 1099s, QCD Reporting, and What to Watch Before Filing

As tax season approaches, many investors want to file as early as possible and move on. But when it comes to investment accounts and retirement distributions, filing too quickly can sometimes create more work, not less.

Two things in particular are worth paying attention to this year: the timing of 1099s (including corrected forms) and new reporting for Qualified Charitable Distributions (QCDs).

Why Waiting Can Help

Custodians typically release tax forms in waves through February. But it’s common for corrected 1099s to follow in late February or early March as firms finalize cost basis adjustments, reclassifications, or late updates from fund companies.

If you file before those corrections arrive, you may end up needing to:

• Amend your return
• Rework numbers with your CPA
• Or respond to an IRS mismatch notice later

For investors with taxable accounts, multiple funds, or more complex activity, a short delay in filing can often save a lot of hassle.

New QCD Reporting Guidelines

For those over age 70½ making Qualified Charitable Distributions from IRAs, the IRS introduced a small but helpful update this year.

Form 1099-R now includes an optional “Code Y” in Box 7 to identify QCDs.

When used, this code:

• Clearly flags the distribution as charitable
• Helps prevent it from being mistakenly taxed as income
• Makes reporting cleaner for taxpayers and preparers

However, because the code is optional for 2025, some custodians (including Schwab) may still report QCDs the old way.

That means it’s still important to:

• Review your 1099-R carefully
• Confirm your QCD amount is properly excluded
• Make sure your preparer knows which distributions were charitable

Even if the form doesn’t show Code Y, the tax treatment is still available, it just may require manual reporting.

Another Note on Payments

While most refunds are now issued via direct deposit, the IRS still accepts paper checks for tax payments. Digital is standard, but traditional options remain available if needed.

Bottom Line

A smoother tax season often comes down to timing and review:

• Don’t rush to file before all 1099s (and corrections) arrive
• Double-check retirement distributions and QCD reporting
• Coordinate early with your tax preparer

A little patience now can help avoid extra paperwork later.

Whenever you're ready, we’re here to help:

Managing your own finances can be overwhelming. If you’d like to experience the benefits of working with a trusted advisor we invite you to schedule a no-obligation phone call to explore how working with Ark Royal might enhance your wealth and peace of mind.

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