Schwab Tax Forms & Qualified Charitable Donations
Tax season is just around the corner and we want to help make sure you have everything you need to file your taxes. Schwab's 1099 dashboard provides a quick, personalized way to view expected availability dates of 1099 Composite forms for your eligible brokerage account(s) that had taxable activity in 2024. Other tax forms will be listed as they become available. You can access the 1099 Dashboard online at schwab.com/1099dashboard or via the 1099 Tax Forms screen on the Schwab Mobile app. The next batch of tax forms will be available on 2/14 and the final batch will be available on 2/28.
Schwab tax forms and statements can also be accessed using Beacon's Client Portal. Click here to login. Once you are logged in, select the 'Vault' tab at the top, then select '2024 Tax Forms', select 'Tax Forms' and then '2024'. Please give us a call if you have any issues accessing your tax documents or if you'd like us to share copies securely with your CPA.
Click here to access our Tax Preparation Checklist. Please be advised we are NOT CPAs. We are always collaborating with your CPAs to make sure we are acting together in your best interest to preserve and protect your wealth in a tax efficient manner.
Did you make a Qualified Charitable Distribution (QCD) last year? If the answer is yes, please make sure your tax preparer knows about it!
Charles Schwab, your account custodian, is not required to report a QCD transaction on Form 1099-R. Instead, it will show up as a regular distribution to the IRA owner. A regular distribution is normally a taxable event. A tax preparer, especially at this time of year, will simply look at the 1099-R and include the entire amount in the IRA owner’s income where it will become taxable.
A wonderful benefit of a QCD transaction is that it is supposed to be a non-taxable transaction. The IRA owner should advise their tax preparer that they made a QCD last year and provide the amount of the QCD. There should be an acknowledgement from the charity of the receipt of the IRA funds. Once the tax preparer knows you made a QCD they then need to report it on the tax return.
On Form 1040, the entire amount on the 1099-R is put on line 4a. On line 4b, any taxable amounts distributed will be filled in. The discrepancy between line 4a and line 4b, which should be the QCD amount (and possibly an additional amount attributable to a rollover or a distribution of after-tax funds), is explained by including the notation QCD on line 4b. This process removes the QCD amount from the individual’s taxable income. The final step in the process is for the individual to review their return and make sure that their QCD is not included in their income.
If the QCD has been missed and the return has already been filed, individuals can amend their returns back three years for a tax refund. You don’t have to look very hard to find out if the QCD was reported or not; you only have to look at lines 4a and b on the 1040. Please remember, tax preparers are not mind readers. Sometimes they need, and generally appreciate, a little help in preparing our tax returns. Don’t assume they know you did a QCD.