Brokers delay tax statements for investors

— -- Taxpayers may be infamous for procrastinating when it comes to doing their returns. But this year, many have a good excuse.

Several popular online brokerages, including Charles Schwab, Raymond James, ShareBuilder, TradeKing, Wells Fargo Advisors and Zecco, asked for 30-day extensions of the Feb. 15 deadline to send out tax forms. So some investors might have to wait a full extra month.

The delays affect tax preparers and taxpayers who will have a shorter period of time than usual to get their taxes done or must wait longer to get their refunds. Tax preparers say allowing firms to delay past the long-standing deadline is straining the system.

"This is becoming an increasingly difficult situation," says Gary Anspach, a tax preparer at Anspach Financial. "Taxpayers are frustrated." The delays at some brokerage firms in releasing final tax forms, which summarize taxable dividends and capital gains and losses, are resulting from:

•New capital gains reporting requirements. Many brokerages that still haven't mailed out tax forms rely on Penson Financial, a large back-office brokerage services company, to process tax forms. New rules requiring brokerages to track how much investors paid for securities that were sold are causing delays for many firms, Penson says. It says forms will be completed by March 15.

•Vagaries of investment types. Some tax forms are being delayed or marked as preliminary if they contain investments that tend to make tax adjustments after Feb. 15, such as real estate investment trusts. Wells Fargo Advisors mailed most of its statements by the deadline. Some are marked as preliminary and may be corrected as late as March 15. Raymond James, too, will mail out statements to investors as late as March 15 if they own investments that tend to make adjustments.

•Efforts to reduce corrections or amendments to tax forms. Schwab mailed out all its tax forms to clients by Feb. 21, taking extra days to reduce the number of amended statements, it says. ShareBuilder says most investors have their statements, but 20% of account holders got them as late as Feb. 27 in an effort to reduce corrected returns.

Rules need to be changed so tax forms are again sent to taxpayers by the end of January, as used to be the case, Anspach says. Corrections should be reflected in the following year's returns. "The deadline had been Jan. 31. That worked for decades," he says.