2023 corrected form 1040

[PATAX]

I have to file corrected form 1040 because client received brokerage statement, 1099 int div b,, after original return was filed and didn't know it was coming. Original 2023 1040 was e-filed, but the client wants to mail the 2023 1040x. I haven't done one in a while, so do I have to attach the new brokerage statement 1099s to the paper file 1040x? Sorry if this is a stupid question. Thank you

[Just-Lisa-Now- · Accepted solution]

I wouldn't.  I also wouldn't paper file it, what's their reasoning for that?   The processing time is the same, by EFiling, you eliminate the risk of it being lost in the mail, lost at IRS or screwed up by a data entry clerk once it arrives at IRS.

[PATAX]

@Just-Lisa-Now- Thanks Lisa. She is an old-timer. She was around when Johnny Appleseed came through the area.😉

[dascpa]

In my experience the IRS is extremely slow at posting and matching corrected W-2's, 1099's etc. Sometimes this causes a mismatch letter, other times it doesn't.

The extra brokerage account is happening more and more as clients seem to have 2-10-20 brokerage accounts for whatever unknown reason.

I typically add with the reason for the amended return the brokerage house name and account number of the new account, or the name and EIN of the new K-1 or similar. 

[PATAX]

@dascpa thanks das. I'll note the new account number with the name of financial entity.

[IRonMaN]

Someone at the IRS actually looks at account numbers?  Personally, I would just have an explanation saying "client received a 1099 from Always Late Investment Co after the original return was filed and the return has been amended to reflect the additional 1099".  As long as you have the revised IRS tax forms attached to the 1040X the IRS will figure it out --------- eventually.

[BobKamman]

These usually come when there are exotic investments that aren't required to issue 1099 by the Feb 15 date.  REMICs and the like.  Client probably doesn't know how her broker is investing her money, and broker probably doesn't know how this delays her tax filing.  Next year she will probably bring some K-1s.  Did the original return show a refund, and the amended will result in a balance due?  And she doesn't want to pay online, or is afraid the payment will not be matched with the return?  

No one is going to keypunch the amounts on the 1040-X either way, they are going to manually enter the adjustments in the format required by the IRS system after looking at the document you file.  1099's aren't attached to paper returns unless there is withholding.  Keep it simple.  "Additional interest was reported on 1099 received after original return was filed."  

[PATAX]

@IRonMaN thanks Iron Man. I'll put that explanation on part two of the 1040x, explanation of changes.

[PATAX]

@BobKamman thanks Bob. I'm not going to attach the 1099s because there was no withholding. Just interest dividends and capital gains. Last year she had two accounts with this broker. This year there are three accounts. Dascpa is correct, this is happening more often.

[BobKamman]

Must be nice to have so much money you don't need to keep track of how many accounts you have put it in.  And then to be able to afford @PATAX fees besides!  Probably one of those "managed accounts" where you pay 1% or 1.5% of the value for the privilege of having someone else decide how to lose your money.  Has anyone seen one of these that actually resulted in increased value for the year? Or maybe it earned 3% so that the profit is evenly split.  

[PATAX]

@BobKamman 👍 one would think that they would keep track of their Investments. Years ago I would usually not charge for a corrected return for something like this. But this was not my fault, and I'm going to have to charge a fee. But it is going to be reasonable.

[IRonMaN]

In their defense, with some of these brokers it can be hard to keep track of accounts.  One year they have 6 accounts, then the next year it's 4, followed up by 2 and then back upwards to 5.  And then throw in paper vs electronic 1099s just to make life interesting.

[Skylane]

I'm voting all of the above...........   1040x paper or efile.... as long as there's a payment attached, the IRS will accept. 

[BobKamman]

This is a situation that sometimes I can spot if I remember to look at the two-year comparison feature.  If it's the same amount of money, it should be earning as much as the year before.  If the third account was funded from the other two, the lower income should be questioned.  But this year, with rising interest rates, many investors were earning much more than in 2022, even with one hand tied behind their back (or one arm being twisted by a broker looking for more commission income).  

[qbteachmt]

"Last year she had two accounts with this broker. This year there are three accounts. Dascpa is correct, this is happening more often."

Opening a new account for a customer = extra commission to the sales person.