Why 1099s aren’t the whole story

I’m naturally optimistic, but even I have to face the truth each tax season: most clients don’t fully understand their tax documents.

You might be thinking, “Steven, isn’t that why CPAs exist?” True, but here’s the catch: tax forms like 1099s rarely contain everything a CPA needs to prepare an accurate return.

If a CPA only receives standard year-end forms and the client isn’t aware of what may or may not have been reported, mistakes are easy to make. Over a lifetime of filing 50+ returns, even small oversights can add up.

And remember, the IRS is far more focused on collecting money owed than paying refunds. Errors in their favor may never be noticed. Every year, we see situations where clients could have overpaid taxes if we hadn’t coordinated with the Financial Advisors we work with.

Just this week, a client assumed we had everything we needed because, “You have the 1099s from Schwab, that’s all, right?”

Luckily, Retirement Tax Services has a process in place: we contact the advisor to get missing context. Most tax preparers don’t, but with that extra step, mistakes are caught before they become costly.

Remember, 1099s are only part of the big picture. Taxes are confusing for most clients. A small statement like, “We’re happy to answer any questions your tax preparer has about the accounts we manage,” can drastically improve their experience.

The biggest wins come from small, consistent actions applied over time.

Happy Tax Planning!

Steven Jarvis, CPA

P.S. It is tax filing season, so I’m not suggesting you call every CPA or EA in your network to schedule lunch and explain how proactive you plan to be. You should check their calendar first.