Elder Client Planner - Spidell Publishing, Inc

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January 29, 2007

Spidell's Elder Client Flash Email

#2007-1 : Filing tax returns early may mean headaches later

Getting a jump on filing 2006 returns may sound like a good idea, but trying to finish returns with income from 1099s now could lead to more work later because brokerage firms are having difficulty sending correct 1099s by the end of January.

Big tax law changes this year could worsen a problem faced by many brokerage houses over the past several years: revised Forms 1099. Also, some brokerage houses have requested an extension of time to send the 2006 Forms 1099.

Some of the major brokerage houses that have asked the IRS for an extension of time to send Forms 1099 to clients. The IRS refused to issue a blanket extension to brokerage firms, but opted instead to consider requests from individual firms.

Suggest that clients wait for possible amended 1099s rather than risk additional fees for preparing amended returns. You may want to have clients ask their brokerage firm if it has requested an extension for issuing its 1099s.

For timely, important information on all the issues facing your baby boomer clients, subscribe to Spidell's Elder Client Planner. This monthly newsletter discusses all the tax, legal, and financial topics you need to help your clients with retirement. Go to www.elderclientplanner.com for information or call (714) 776-7850.