December 8, Tax Season Overview

Transcription

1 December 8, Tax Season Overview To help you navigate through the 2016 tax season, this comprehensive communication provides links to various supporting materials and resources: Home office tools Investor Information Tax statement changes We will update this communication as more information becomes available and include it in our weekly Pershing Update. NOTE: This communication is not for public distribution and should not be posted on any public-facing website. For more information, please contact the Client Services team and select option 5 for General Client Service. Pershing s Direct Brokerage Services (DBS) clients should contact their Account Manager. Home Office Tools Resource Details Find It Mailing Schedules Tax Reporting Tools and Resources We are continuing the phased mailing approach for IRS Form (B, DIV, INT, OID and MISC) tax statements for the 2016 tax year. Tax documents will be posted in e-document Suite, as well as Items for Attention (IFA) via NetX360 as they become available. This includes Draft s, Initial s, Pending Notices and Revision Mailings. As a reminder, entitlements are required to view these documents. Note that draft forms are not available to investors. They are not mailed or delivered electronically, and they are not viewable in NetXInvestor. New for 2016: Courtesy s will now be delivered during each phase of the mailing. Courtesy s are available to foreign accounts, and S and C corporations (excluding IRA and qualified plans). If enrolled in e-delivery, investors will receive an notification that a Courtesy is available. Courtesy statements will not be delivered by mail. Note: The Courtesy statement is being provided for informational purposes only and will not be furnished to the IRS. Provides the latest tax information and resources in one convenient location, including links to communications, tax materials, training information, webcasts and more. Phased Mailing Schedule for s Posting Schedule for e- Document Suite and IFA: Initial Mailing Posting Schedule for e-document Suite and IFA: Revision Mailing Posted to e-document Suite; if enrolled in e-delivery, investors will receive notification that a Courtesy is available NetX360 > Marketing Center > Materials and Resources > Tax Reporting Tools and Resources 2016 Pershing LLC. Pershing LLC, member FINRA, NYSE, SIPC, is a wholly owned subsidiary of The Bank of New York Mellon Corporation (BNY Mellon). Trademark(s) belong to their respective owners. For professional use only. Not for distribution to the public. Last Update 12/22/2016 1

2 Home Office Tools (continued) Resource Details Find It Self-guided Learning eanalytics Download to Excel Sample Tax and Year-end Statement (TYES) TYES Enrollment Changes Tax Reports for 2016 The following training modules are now available: Tax Season: Correction Processing Tips It s not just about finding the right Service Center path! Improve the investor experience by holding incomplete tax statements, updating cost basis and tax details online and collaborating with us. Tax Season: Drive Investor Confidence An investor may ask, When am I going to receive my? or How do I fix my tax statement? How would you respond? Get tips to answer the most common investor questions with confidence. New for 2016: Download to Microsoft Excel Provides for download of data to Excel for reportable information by tax year (for -B, DIV, INT, OID and MISC). This will allow users to view and filter aggregated data in various ways, including Office, IP, TIN, CUSIP and Household. Pershing s tax statement received a rating of Excellent and four stars for tax year 2014 in DALBAR S 2015 Trends and Best Practices in Tax Reporting study. To introduce a more efficient, streamlined process for preparing clients -B forms, we are adding account-level enrollment option to the TYES, the premium version of our statement that includes cost basis and realized gains and losses for the covered and noncovered positions. In addition to enrolling at the introducing firm (IBD), office (OFF) and investment professional (IP) level, you will now be able to include or exclude individual accounts as needed, up to 3,000. IRS B Notice Reports (TXA997A1 and TXA997A2) Reasonable Cause Reports (TXA822R7 and TXA822R8) Revision Reports (BMO521A0 and BMO521A1) Waiting for Data Report (TXA840R0) Tax Statement Initial and Revision Mailings Report (TXA125D0) Tax Statement Initial Mailing Account Detail Report (TXA126R0) Tax Statement Revision Mailing Account Detail Report (TXA127R0) Backup Withholding (TXA585R0) Hold Report (report ID: pending) Revision Report (report ID: pending) YTD NRA Chapter 3 and Chapter 4 Withholding (TXA310R0) Available here Available here NetX360 > Reports and Documents > Reporting > eanalytics 2.0 Sample in Tax Reporting Tools and Resources in Marketing Center An investor-friendly version is available at mytaxhandbook.com Via NetX360 > Admin > Admin Tools > Information Delivery > Tax and Year-End Statement/Year-End Account Report Via NetX360 Report Center 2

3 Home Office Tools (continued) Resource Details Find It Revision Process e-delivery The first revision mailing for Form s is planned for February 15. By this date, we plan to mail the first batch of revisions which will report changes to any tax statements mailed by January 31 as part of phase one. Revisions will then occur by February 28 and by March 15 to report corrections to tax statements mailed in any of the previous mailings. After March 15, revisions will be sent weekly. You can view drafts of revised tax statements within e-document Suite the Monday prior to their mailing and have the opportunity to review the accuracy of recent cost basis adjustments, as well as other sensitive transactions. If additional adjustments are pending, users can hold a revised tax statement mailing through TXAS- Tax Reporting System/TEFRA until the next scheduled production print. This feature could prevent multiple revisions being mailed to your clients. Hold requests must be submitted by 8 p.m. (ET) on February 17 for the February 28 mailing and March 3 for the March 15 mailing. When the weekly revision process begins, hold requests must be submitted by 8 p.m. (ET) on Tuesdays. In addition to being environmentally friendly, e-delivery will provide the fastest access to clients Form (B, DIV, INT, OID and MISC), as well as the -R, -Q, 5498 and 5498-ESA. Elect to send your clients any of the statement messages to remind them of the benefits of e- delivery during tax season and all year around. (Note: Client statement message requests must be received by the 15th of the month.) Form -B cost basis inquiries: Global Tax Management > Tax Reporting > Cost Basis Reporting All other Form tax statement correction requests: Global Tax Management > Tax Reporting > Tax Information Statement View the Task Reference called, Request a Delay of a Revised Tax Statement (TXAS), in the NetX360 Learning Center and search using keywords Request a Delay of a Revised Tax Statement Statement messages 3

4 Investor Information Resource Details Sample mytaxhandbook.com Important tax information available for your clients, including royalty trust information (available by March), a supplemental information tool (available by March) and an investor friendly sample TYES. mytaxhandbook.com Tax Guide Pending Notice Tax Reporting and Cost Basis Statement Insert Statement Messages The Tax Guide will have important information for you and your clients. It explains how to read various tax statements and provides pertinent tax reporting instructions and requirements to help clients prepare their tax returns. This notification is used when we have not received and processed all necessary information from issuers to complete 2016 reporting for a client s account prior to the cut off for the February 15 mailing. Once the remaining information has been received and processed, we will mail the client s form. Communicates information regarding the 2016 tax season, including mail dates and cost basis information, which is sent with December statements. A statement message will be included in investors November and December statements (for accounts eligible to receive a consolidated ) informing them of the tax statement mail dates. A separate message will be included in January (for accounts eligible to receive a consolidated ). Coming soon Pending Notice Tax reporting and cost basis statement insert Sample November and December text Sample January text 4

5 2016 Tax Statement Changes Change Details -B Code (Box 1f) has been changed to Accrued Market Discount (Box 1f). Adjustments (Box 1g) has been changed to Wash Sale Loss Disallowed (Box 1g). A new checkbox has been added to the existing (Box 2) values for Ordinary Gain. -INT New column for Bond Premium on Treasury Obligations (Box 12). -OID New column for Bond Premium (Box 10). The Original issue discount on U.S. Treasury Obligations (Box 8), allows both positive and negative amounts to be reported. FATCA Filing Requirement The FATCA Filing Checkbox is now included on Form -B and Form -R. Transactions We Do Not Report to the IRS Section Complex Debt The Advisory Fees section will now display CUSIP and Description along with Transaction Type. Complex bonds became reportable in These include bonds with more than one rate, convertible bonds, stripped bonds or stripped coupons, payment-in-kind (PIK) bonds, foreign debt, foreign currency debt, some private issues and physical certificates Form 1042-S Changes For the 2016 tax year, the Copy B (for recipient) will display one Copy B per page for each applicable income, withholding exemption and chapter status code. The IRS has renumbered the recipient information boxes on the S Copy B (for recipient) version of Form 1042-S. The IRS has also added a Box 13J, where the limitation of treaty benefits codes will be posted, to the extent that the investor has claimed a reduced treaty rate of withholding, and was required to provide the limitation of treaty benefits information on his or her W-8 document. 5

6 Statement Messages A statement message will be included in investors November and December statements informing them of the tax statement mail dates: Please note the following information for Pershing s 2016 IRS Forms (B, DIV, INT, OID and MISC): Your form will be delivered as early as possible, beginning January 31, By February 15, you will be mailed either your form or a special Pending Notice. The Pending Notice will be sent if issuers of securities you hold have not yet provided their final tax information. It will inform you of the securities that are pending final reporting, and will provide the anticipated mail date of your form. Your will be mailed no later than March 15, The following message will be included in the January statement: Important Reminder for Pershing s 2016 IRS Forms (B, DIV, INT, OID and MISC): As a reminder, by February 15, 2017, you will be mailed either your form or a special Pending Notice. The Pending Notice will be sent if issuers of securities you hold have not yet provided their final tax information. It will inform you of the securities that are pending final reporting, and will provide the anticipated mail date of your form. Your will be mailed no later than March 15, Electronic Delivery In addition to being environmentally friendly, electronic delivery (e-delivery) will provide the fastest access to clients forms, as well as other tax documents. You should consider using one of the statement messages below to reinforce the benefits of e-delivery during tax season and all year around. (Note: Client statement message requests must be received by the 15 th of the month.) Message 1: As tax season approaches, remember to enroll in e-delivery of eligible tax documents. Benefits include faster access to your information no waiting for paper documents to arrive in the mail and an easy way to share with accountants through downloading, then ing. Enroll today. Message 2: Electronic delivery of account communications can make managing your financial information easier and tax documents are no exception. You can have anywhere, anytime access, including the ability to download and tax documents to your accountant. E-delivery is the convenient way to approach tax season! If you re enrolled in e-delivery of account statements, but not tax documents, click the Go Paperless icon when you log in and add tax documents. Message 3: You can take some of the hassle out of tax season by signing up for convenient online access to tax documents Get access to your important tax documents more quickly and share them with your accountant via . Enroll for e-delivery today. 6

7 Phased Mailing Schedule The table below provides anticipated mailing dates for Forms, which are generally driven by securities in an account. Mailing Phase Scheduled Mailing End Date Mailing Event 1 January 31 > Form will be mailed for accounts with holdings and income that typically do not require reclassification or additional information from issuers. Generally, this includes accounts holding fixed income (debt) or equity-only investments and options. 1 2 February 15 > Form will be mailed for accounts holding mutual funds, certain unit investment trusts, real estate investment trusts (REITs) and certain equities, because the issuer provided their final tax information after the January 31 mailing is prepared. 1 > Pending Notices will be mailed for accounts where we are awaiting data from issuers. The notice will list investments that are awaiting information from issuers or trustees and indicate the possible mail date of an investor s. This notice, which will be available in e-document Suite, will be mailed when issuers of reportable income cannot provide final tax information before the February 15 mailing is prepared. This letter will identify the income impacting the mail date. > Revision mailing for s sent in Phase One, as required. 3 February March 15 2 > Form mailing will occur for accounts for which we can now include information that was previously pending income reclassifications from issuers of mutual funds, REITs and certain equities, because the issuer or trustee has provided Pershing with final tax information. Generally, this includes remaining mutual funds, REITs and certain equities. 1 > Revision mailing for s sent in phases one and two, as required. > Form mailing will occur for all remaining accounts, regardless of whether pending income reclassifications for the account s income have been received from issuers. Generally, this includes accounts holding complex non-equity securities, such as real estate mortgage investment conduits (REMICs), widely held fixed investment trusts (WHFITs) and some UITs. > Revision mailing for s sent in all previous phases, as required. 1 Holding only these types of securities does not guarantee that your clients tax statements will be mailed on the indicated date. 2 Pershing s 30-day extension to the mailing requirement will accommodate these phases of the mailing. 7

8 Posting Schedule for e-document Suite and IFA: Initial Mailing Scheduled Completion Date* January 16 January 31 (Phase 1) Available Document e-document Suite IFA Display Initial baseline draft s for accounts receiving a 2016 Tax Information Statement Initial s for accounts in the Phase 1 mailing n/a n/a Notes The baseline draft will be available throughout the tax season within e- Document Suite. Updated drafts of s not yet mailed (waiting for data drafts) n/a This will provide the most current draft information. February 15 (Phase 2) Initial s for accounts in the phase two mailing n/a This will replace the January 31 drafts for accounts receiving initial mailings in this phase. Pending Notices for accounts for which we are awaiting data from issuers Document Type: Pending Form Type: Pending Pending Notification will be mailed or e- delivered to your clients. A pending IFA will be populated, alerting you of the Pending Notice mailing. Updated drafts of s not yet mailed n/a This will replace the remaining January 31 Drafts with the most current Draft information for accounts still pending information. February 28 (Phase 3) Initial s for accounts in the phase three mailing n/a This will replace February 15 drafts for accounts receiving initial mailings in this phase. Pending Notices for accounts for which we are awaiting data from issuers Document Type: Pending Form Type: Pending Pending This notice will not be mailed to clients. Pending IFA will be populated again, reducing it to only the accounts that have not received tax statements by the end of February. Updated drafts of s not yet mailed n/a This will replace the remaining February 15 drafts with the most current draft information for accounts still pending information. March 15 (Phase 4) All remaining initial s mailed by March 15 n/a This will replace all February 28 drafts. *Scheduled completion dates are subject to change. 8

9 Posting Schedule for e-document Suite and IFA: Revision Mailing Scheduled Completion Date* Available Document Document Type in e- Document Suite IFA Display Notes February 15 Draft revised s for accounts in the phase one mailing Drafts Draft revisions of accounts delivered during Phase One. Revised s for accounts in the phase one mailing, as applicable** Revisions This revision mailing will replace the February 15 drafts. February 28 Draft revised s for accounts in the phase one or two mailings Drafts Draft revisions of accounts delivered during Phases One and Two. Revised s for accounts in the phase one or two mailings, as applicable** Revisions This revision mailing will replace the February 28 drafts. March 15 Draft revised s for accounts in all previous phases Drafts Draft revisions of accounts delivered during Phases One, Two and Three. Revised s for accounts in all previous phases, as applicable** Revisions This revision mailing will replace the March 15 drafts. Weekly on Monday, starting March 20 Draft revision s Drafts Weekly draft revisions of all accounts delivered. Weekly on Thursday, starting March 23 Revised s for accounts sent previously, as applicable Revisions This revision will replace the Monday drafts. *Scheduled completion dates are subject to change. **Refer to Pershing s tax calendar, Tax Reporting Important Dates, in NetX360 for more information. 9

10 Pending Notice The Pending Notice serves to inform investors of what may be causing a delay in production of their Tax Forms. It will list securities for which final tax reporting information has not yet been provided be the security issuer. 10