Ask Liz Weston

Get smart with your money

paperless

Q&A: How do I get tax forms from my online bank?

By Leave a Comment

Dear Liz: I have a savings account and a revocable trust money market account with an online bank. They provide the 1099-INT tax form for the savings account as a downloadable file. However, they do not provide a downloadable form for the trust account money market.

They insist that it can only be mailed after Jan. 31 and cannot be downloaded online. When I complained several times, saying that I received trust account tax forms from other financial institutions, I received frivolous answers.

Can you explain what is going on here and what I should do to get my 1099-INT early so I can do my taxes without having to wait for it?

Answer: What’s going on is that the bank and its customer service reps are ignorant of the law.

There’s no requirement that the form be downloadable, but the Internal Revenue Service does require 1099-INT forms to be provided to recipients and to the IRS by Jan. 31, says Mark Luscombe, principal analyst for Wolters Kluwer Tax & Accounting. This year, the deadline was actually Feb. 2, since Jan. 31 fell on a weekend.

Since the IRS can levy penalties for late filing, you can be sure the bank has found a way to electronically provide the forms to the tax authorities, even if it can’t be bothered to get them to you.

As you’ve personally experienced, other financial institutions give their customers access to the forms well before the deadline. You can’t personally reform a dysfunctional institution, so consider moving your business to one that provides actual customer service.

Q&A: When institutions won’t go paperless

By

Dear Liz: I have for years insisted on being paperless, not only for credit card statements and utility bills but also for tax documents such as the 1099-INT and 1099-DIV. My problem is that I receive income from two lifetime annuities and those of course generate 1099-R forms each year, which are mailed to me. I have requested to receive those as PDFs from the companies that execute those annuities, and they claim they cannot do so and are not required to. Are they right, or is there some federal regulation I can quote to force the issue?

Answer: The idea that a business can’t generate an electronic form for a customer is a little ridiculous, but there’s not much you can do to force these companies to get with the times.

The IRS requires that any person or entity that files more than 250 information returns — 1099s, W-2s and other forms that report potentially taxable income — do so electronically. But that requirement applies only to forms being sent to the IRS, says Mark Luscombe, principal analyst for Wolters Kluwer Tax & Accounting. There’s no requirement that such forms be issued electronically to individuals.

Which is unfortunate, since as you know getting forms electronically is much safer than having your private financial information sent through the mail. Since these companies are so insistent on clinging to paper, consider sending a letter — certified mail, return receipt requested — to the companies’ chief executives requesting that they join the 21st century.