Important Tax Information

If possible, we recommend clients wait until late March to report their stock transactions and file their taxes. If you file earlier, you may have to file an amended tax return. Here are some important dates and information to keep in mind:

Key 2016 Retirement Savings Numbers

Key 2016 Education Savings Numbers

Ethical Wrap Program:

Tax Documents Posting Date Additional Information Where can I download it?
1099-R Form (All IRAs) No later than January 31 Form 1099-R shows distributions from IRAs. An email is forwarded to alert you when this form is posted to your account online. Please review and call your advisor if you believe there are any discrepancies. 1. Click Here
2. Log into your account.
3. Click on Statements &Tax Records tab at the top of the page.
4. Click on Tax Center
1099 Forms (Taxable Accounts) Expected to be no later than February 28, but may be as late as March 15 1099s show capital gains, interest, dividends and other taxable amounts. You’ll only need the first two pages. *Corrections to 1099s may be issued when companies reclassify prior year distributions. Neither broker, nor advisor has control over this. 1. Click Here
2. Log into your account.
3. Click on Statements &Tax Records tab at the top of the page.
4. Click on Tax Center
IRS Form 8949 Expected to be no later than February 28, but may be as late as March 15 These reports contain your taxable account’s cost basis information as reported to the IRS. It shows sales and other dispositions of capital assets, capital gains and losses, and replaces the gain/loss reports of prior years. 1.Click Here
2. Log into your account.
3. Click on Statements &Tax Records tab at the top of the page.
4. Click on Tax Center
Required Minimum Distributions (Retirement Plans) April 1 (December 31 if over age 70.5) The last day to withdraw funds for first-time required minimum distributions is April 1 and December 31st if over age 70.5. *If you are age 70.5, you must take out RMDs from all retirement accounts except Roth IRAs. 1. Click Here
2. Log into your account.
3. Click on Statements &Tax Records tab at the top of the page.
4. Click on Tax Center

Azzad Mutual Funds:

Tax Documents Posting Date Additional Information
1099-R Form (All IRAs) No later than January 31 Form 1099-R shows distributions from IRAs. 1099 Forms were mailed out by our transfer agent. If you did not receive your form or believe there is a discrepancy, please call 888.350.3369.
1099 Forms (Taxable Accounts) Azzad Ethical Fund (ADJEX) No later than January 31 1099 Forms were mailed out by our transfer agent. If you did not receive your form or believe there is a discrepancy, please call 888.350.3369.
1099 Forms (Taxable Accounts) Azzad Wise Capital Fund (WISEX) No later than January 31 1099 Forms were mailed out by our transfer agent. If you did not receive your form or believe there is a discrepancy, please call 888.350.3369.
Azzad-Senior-couple

TAX FAQs

The following frequently asked questions are for general informational purposes only. Please note that Azzad Asset Management does NOT provide tax advice. We strongly recommend that you consult with your accountant or tax professional.

  1. What are taxable accounts?
    Taxes must be reported and paid on accounts such as individual, joint, custodial (UGMA/UTMA), trusts and various corporate accounts. You must pay capital gains taxes on any realized gains as well as on any dividends or interest generated in the account.
  2. What is the new cost basis legislation?
    Congress passed the Emergency Economic Stabilization Act of 2008 (TARP) which included significant new tax reporting requirements for broker dealers, mutual funds and others with respect to their customers’ transactions. These requirements will be phased in beginning year 2011.
  3. How will the new cost basis legislation affect wash sales?
    The new cost basis regulations require that brokers adjust tax lots as a result of wash sales that occur with an identical security in the same account. Wash sale rules apply only to losses. Note: the wash sale rule applies across multiple accounts. You are not allowed to claim the loss that results from a wash sale. The disallowed loss amount is reported to the IRS.
  4. What are “covered” and “noncovered” securities?
    Stocks purchased on or after 1/1/2011 in taxable accounts are considered “covered” securities. Those purchased prior to that effective date, are “uncovered securities”. Mutual Funds purchased on or after 1/1/2012 in taxable accounts are considered “covered” and those purchased prior to that date are considered “uncovered” securities. You are responsible for reporting the cost basis for all covered and uncovered securities to the IRS on your tax return.
  5. What information do I need for my taxes?
    For taxable accounts, you will need your 1099 Form and Form 8949. These Forms can be downloaded online by clicking on the Statements & Tax Records tab at the top of the page. Please remember to select the proper year. The Ethical Wrap Program’s 1099 Form is a single document with sections for the IRS Forms 1099-DIV, 1099-INT, 1099-MISC, 1099-OID and 1099-B. The 8949 Form includes your account’s cost basis information.
  6. How has my 1099 Form changed?
    Our broker has redesigned the 1099-B Form to report sales in the same categories that are used when preparing your taxes. The new form categories match those found on the redesigned IRS Schedule D and Form 8949. Although the IRS requires that our broker report cost basis for covered securities only, they’ve included gain/loss information for noncovered securities in your account as well, since you will still have to report this information to the IRS in order to complete your taxes.
  7. Why am I receiving a corrected 1099?
    You should check your Form 1099 before filing because amendments to Form 1099s are frequently issued, especially if you hold REITs or mutual funds. There may even be multiple amendments made to your Form 1099 before the tax filing deadline. Therefore, we strongly suggest that you wait until at least the end of March before downloading your Form 1099 in order to allow any reclassifications or corrections to his Form 1099 to occur. You will be emailed when your Form 1099 has been amended. Our broker has no control over the reclassifications that cause 1099 amendments and you may have to amend your return if you file early.
  1. To which year do my IRA contributions apply?
    IRA contributions received between January 1 and December 31 are automatically designated as contributions for the year they are received in. If you intend for any contributions sent between January 1 and April 15 to go toward the previous year’s contribution, you must indicate this on your check. If contributing by electronic deposit (EFT, wire or billpay) you must send us an email in a timely manner (no later than April 15) referencing the contribution.
  2. Can I still open and contribute to an IRA for the previous tax year, this year? (for example, can I open an IRA for 2015 even though it is 2016)?
    If you are eligible to open an IRA (you are younger than 70.5 and have earned income), then you may open your IRA and contribute to it up until April 15 (even if it is for the previous year). For example, you may open and fund your 2015 IRA in year 2016, but before April 15. If you are funding your IRA by check, you must mark the year you intend the contribution to be applied. If you are funding your IRA electronically, you must call the custodian to ensure that it is properly coded. Otherwise, the custodian will apply it to the year it is received.
  3. Can I convert from a Traditional IRA to a Roth IRA?
    Yes. There are no longer income restrictions on who may convert from a Traditional IRA to a Roth IRA. However, taxes on the converted amounts are due in the year the conversion occurs. There are advantages and disadvantages to Roth conversions. Please check with your financial adviser representative for more information.
  4. Last year, I contributed to a nondeductible IRA and immediately converted it to a Roth IRA. Why am I receiving a 1099-R?
    A 1099-R is generated anytime money is taken out of an IRA (regardless of the reason). You must report the nondeductible IRA contribution on Form 8606. You must also report the conversion using form 1099-R. Remember, just because you receive a 1099-R does not mean you owe taxes. It does mean that your distribution is tax reportable (whether or not it is taxable depends on your specific situation). Please consult your tax professional for more information.
  5. What is a 1099-R Form?
    If you withdrew money from an IRA account, you will receive a 1099-R Form. This report is furnished to the IRS and must be included in your tax return. It can be downloaded online from your filing cabinet. In addition, if you took out a loan from a qualified retirement plan and defaulted on your payments, the loan automatically becomes a distribution. You will receive a 1099-R Form from your plan’s administrator. Please note that even if you do not receive a 1099-R, you are responsible for reporting and paying any taxes due.
  6. What is a 5498 Form?
    The 5498 Form reports the fair market value of your IRA (as of December 31 of the previous year) and any reportable contributions made to your IRA.
    Reportable contributions include rollovers, contributions, Roth conversion contributions, and recharacterization contributions made to your Traditional, Roth, SEP, SIMPLE and Beneficiary IRAs. You should review the form and report any discrepancies to us as soon as possible.
  7. What is an excess contribution?
    An excess contribution is the amount that was contributed to your IRA for the tax year that is greater than your maximum allowable contribution (the maximum amount includes the lesser of your IRA contributions or taxable compensation for the year). Excess contributions also occur for contributions made for the year you reach age 70½ and any later year.
  8. What is a required minimum distribution?
    A required minimum distribution is the minimum amount that the IRS requires all IRA owners (except Roth IRA) to withdraw from their accounts once they reach age 70 ½. Your account’s RMD is calculated for you by our broker and available online in your filing cabinet. You must withdraw this amount generally before the end of the calendar year or you will owe a penalty. Please consult with your tax professional for more information.