Corrected 1099s - Why You Should Wait to File

A 1099 form reports income from dividends, interest, and capital gains in brokerage (non-retirement) accounts. Brokerage firms provide these documents based on the information they receive from mutual funds, ETFs, and other investment vehicles. As tax season approaches, many investors receive their 1099 forms early in the year and feel the urge to file as soon as possible. However, financial institutions often issue corrected versions. If you receive one of these corrected 1099s and have already filed, an amendment to your tax return may be needed.

Common reasons for corrections

• Reclassification of dividends and capital gains – Some dividends initially classified as qualified may later be reclassified as ordinary, affecting tax liability.

• Updated reporting from investment funds – Mutual funds and ETFs frequently revise their tax reporting data after their initial estimates.

• Errors in initial reporting – Occasionally, brokerage firms identify mistakes in reporting and must issue corrected forms to comply with IRS regulations.

If you look closely, your 1099 likely has a blurb that looks something like this —

So, when should you file? Brokerage firms release initial forms by mid to late February, with corrected versions typically in March but sometimes later. To minimize the risk of needing an amendment, consider checking with your brokerage firm for expected correction schedules and waiting until mid-March to file to give time for potential revisions.

Happy Planning,

Alex

This blog post is not advice. Please read disclaimers.