Vanguard is threatening forced transition within 30 days.

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XB70
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Vanguard is threatening forced transition within 30 days.

Post by XB70 »

Vanguard recently sent an e-mail, apparently to all its remaining legacy account holders, who have yet to "transition" to Vanguard's preferred all-brokerage setup in which forced transition is said to happen within 30 days, where the account will thereafter be "locked" unless the account holder transitions him/herself, losing all configurations and settings, until "unlocked" manually, or some such. *The "locked" status happens, as explained to me, due to the fact that the forced transition doesn't properly answer the questions needed to open a brokerage account, so such a new brokerage account loses all the settings and configurations that were in effect in the legacy Vanguard mutual fund account. But if one already has a brokerage account, presumably properly setup, questions answered, configured, why is a new brokerage account being created?
I did transition when Vanguard first instituted the all-brokerage setup, years ago. My wife did not. After that I noticed two glaring differences in our accounts, listed (1) & (2), but I was able to reverse back to the legacy setup, when that was still possible, no longer, for years now.
(1) After transition to all brokerage, I noticed that my Vanguard fund 1099s were delayed vs. when issued from a legacy all-Vanguard account, by two or more weeks, thus making them too late to be useable to make informed January 15 estimated tax payments. Is this fixed yet? No, it is not, but Vanguard is "looking" at it. Do other brokerages do any better? I need to inquire. Responses here indicate that they are actually worse.
(2) After transition, automatic cross-Vanguard fund dividend investing becomes a problem--aka directed dividends. Such cross-fund dividend reallocation (use dividend of over-allocated fund to buy under-allocated fund) efforts MUST go through a settlement account for a number of days, where the price of the purchased fund is unknown until the trade date, later, NOT same day as is still possible in the legacy all-Vanguard fund accounts, same-day, fund-to-fund direct, same-day pricing, no intermediate settlement fund status. Is this fixed yet? It is not fixed yet, but Vanguard is "looking" at it. If not, I wonder if other brokerages can do better. I need to inquire. Responses here indicate that automatic directed dividend investment may not be available at other brokerages. I need to confirm.
(3) In what sense is this an "upgrade?" Is there a reason anymore to stay at Vanguard? What or why? Do I Iose or gain transferring away, or is it a wash? Forcing my account into a "locked" status wherein I lose all settings that I will have to manually unravel and reverse seems outright HOSTILE. It seems that Vanguard is saying bye, bye, and good riddance, no? (Not exactly, see at top.*) Sure, Vanguard is a mutual company (its fund owners own Vanguard) vs. the for-profit competition, but given this hostility, so what? Anyone? Help!
(4) Although not important to me, I have also become aware of other losses that moving to their all-brokerage setup may entail: dollar cost averaging arrangements and certain IRA conversion features are lost, as reported below. I was not aware of these; perhaps anyone else who is or has been so affected can comment and explain about how "transition" to all-brokerage impacts an account holder's ability to dollar cost average vs. within a legacy all Vanguard fund account, or make certain IRA conversions, or the loss of the YTD numbers, so that makes five downgrades, if correct.
Vanguard claims to carry excess SIPC coverage, but refuses to disclose what it is, in toto or per account, or the insurer, unlike the competition. Granted that that may be more marketing than essential, nonetheless, especially when being forced into brokerage. The legacy all-Vanguard accounts presumably do not avail themselves of any SIPC coverage, or certainly not excess coverage, such as it may exist. Correction? Anyone?
Perhaps there have been changes, and I am ill informed, with respect to (1) and (2) above--not yet. Or perhaps they do have the fixes to these items scheduled for remedy, thus the claimed "upgrade." In what sense is this actually an upgrade? Anyone? They take away the ability to do certain things, at least three, and call it an upgrade. Can anyone advise other losses going to all brokerage entails?
Certainly Vanguard funds themselves have value, but it seems that the brokerage operation may not. Vanguard funds can be traded and held elsewhere. Is there an advantage to holding them in a VBS account? This is not rhetorical, I am asking--anyone? How will Vanguard's mutual company status help me now? Should I move? Where?
As a mutual fund operator Vanguard is the industry leader, to me, Fidelity's zero ER funds and Schwab's selected ER undercutting on a few funds, notwithstanding. Cost isn't everything and other funds or possibly even fund families may suggest themselves in some respects, but that discussion should be in another post. The question here is: Should I continue to use Vanguard as my custodian?
Last edited by XB70 on Thu Jun 20, 2024 6:31 pm, edited 2 times in total.
Doctor Rhythm
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Re: Vanguard is threatening forced transition within 30 days.

Post by Doctor Rhythm »

Vanguard funds can be traded and held elsewhere. Is there an advantage to holding them in a VBS account? This is not rhetorical, I am asking--anyone? How will Vanguard's mutual company status help me now? Should I move? Where?
Welcome to the forum.

I think a more useful question to ask is "How will moving my Vanguard mutual funds from Vanguard to another brokerage benefit me?"

For example:
-- will my transaction costs be lower?
-- will transactions process more quickly?
-- will money no longer need to pass through a sweep account (ie, can distributions from one Vanguard fund be immediately used to buy a different fund)?
-- will tax documents arrive earlier?
-- will the user experience be better (app, website, etc)?

I have accounts at two other brokerages besides Vanguard. For me, there is no meaningful advantage to be gained. That's why I haven't moved my portfolio out of Vanguard.
Last edited by Doctor Rhythm on Sat Jun 15, 2024 7:40 pm, edited 2 times in total.
tibbitts
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Re: Vanguard is threatening forced transition within 30 days.

Post by tibbitts »

XB70 wrote: Fri Jun 14, 2024 9:20 pm Vanguard recently sent an e-mail, apparently to all its remaining legacy account holders, who have yet to "transition" to Vanguard's preferred all-brokerage setup in which forced transition is said to happen within 30 days, where the account will thereafter be "locked" unless the account holder transitions him/herself, losing all configurations and settings, until "unlocked" manually, or some such.
I did transition when Vanguard first instituted the all-brokerage setup, years ago. My wife did not. After that I noticed two glaring differences in our accounts, listed (1) & (2), but I was able to reverse back to the legacy setup, when that was still possible, no longer, for years now.
(1) After transition to all brokerage, I noticed that my Vanguard fund 1099s were delayed vs. when issued from a legacy all-Vanguard account, by two or more weeks, thus making them too late to be useable to make informed January 15 estimated tax payments. Is this fixed yet? Do other brokerages do any better? I need to inquire.
(2) After transition, automatic cross-Vanguard fund dividend investing becomes a problem. Such cross-fund dividend reallocation (use dividend of over-allocated fund to buy under-allocated fund) efforts MUST go through a settlement account for a number of days, where the price of the purchased fund is unknown until the trade date, later, NOT same day as is still possible in the legacy all-Vanguard fund accounts, same-day, fund-to-fund direct, same-day pricing, no intermediate settlement fund status. Is this fixed yet? If not, I wonder if other brokerages can do better. I need to inquire.
(3) In what sense is this an "upgrade?" Is there a reason anymore to stay at Vanguard? What or why? Do I Iose or gain transfering away, or is it a wash? Forcing my account into a "locked" status wherein I lose all settings that I will have to manually unravel and reverse seems outright HOSTILE. It seems that Vanguard is saying bye, bye, and good riddance, no? Sure, Vanguard is a mutual company (its fund owners own Vanguard) vs. the for-profit competition, but given this hostility, so what? Anyone? Help.
Vanguard claims to carry excess SIPC coverage, but refuses to disclose what it is, in toto or per account, or the insurer, unlike the competition. Granted that that may be more marketing than essential, nonetheless, especially when being forced into brokerage. The legacy all-Vanguard accounts presumably do not avail themselves of any SIPC coverage, or certainly not excess coverage, such as it may exist. Correction?
Perhaps there have been changes, and I am ill informed, with respect to (1) and (2) above. Or perhaps they do have the fixes to these items scheduled for remedy, thus the claimed "upgrade."
Certainly Vanguard funds themselves have value, but it seems that the brokerage operation may not. Vanguard funds can be traded and held elsewhere. Is there an advantage to holding them in a VBS account? This is not rhetorical, I am asking--anyone? How will Vanguard's mutual company status help me now? Should I move? Where?
There is rumored to be a fix in the works for the dividend reinvestment feature, although nothing official that Vanguard would tell me.

If you move away from Vanguard and keep your funds vs. ETFs, certain Admiral share class funds probably won't be available, or certainly availble for new contributions (rebalancing, etc.), outside of Vanguard's brokerage services.

My understanding(?) is that with mutual funds in a brokerage account, there is an extra layer (the brokerage component) that SIPC is intended to insure. In a mutual fund account there is no similar structure or associated risk, so no need for that coverage. So... SIPC may not be an advantage to someone holding only Vanguard mutual funds vs. holding those funds in a mutual fund account without SIPC coverage.

The only "upgrade" aspect I can see is for people who want to trade securities other than Vanguard mutual funds. As far as I can tell it's otherwise a downgrade but not one we have a choice to avoid.

A further disadvantage of a brokerage account that I knew about but didn't think about until actually starting the transition today is that if you have someone with "full agent" authority, and his/her employer is a member of FINRA, that may create a potential compliance conflict. I believe I've determined that it won't in my case, but it would have had the employer involved not restructured itself and separated out the FINRA-related component (such that the parent organization is now "unregistered" with FINRA.)

Having had to coerce customers into similar transitions during my career I understand the need for this transition, and understand why some customers are reluctant. Eventually there's really no way to make the transition happen (or have the customer move to another provider) without being... well, a little hostile as you say. You try not to be but at some point you have to shut down the existing service, and some people won't move... even when (as in the migrations I did) there are actually incentives for them to do so, and fewer downsides than in this Vanguard example. I was glad that I could rattle off a list of clearly improved capabilities for the transitions I was "pushing", whereas Vanguard doesn't seem to have nearly as compelling a case.
Last edited by tibbitts on Sat Jun 15, 2024 12:14 am, edited 2 times in total.
Big Dog
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Re: Vanguard is threatening forced transition within 30 days.

Post by Big Dog »

1) 1099's aren't legally due until the end of Jan, so perhaps you shoudl make a separate post inquiring if other brokerages/mutual fund Adminstrators regularly produce 1099's by mid-Jan.

(sorry to hear that Vanguard is forcing the transition now, but it had to happen eventually. It's extremely inneficie :P nt and costly to continue to support multiple IT platforms....)
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Re: Vanguard is threatening forced transition within 30 days.

Post by tibbitts »

Big Dog wrote: Sat Jun 15, 2024 12:11 am 1) 1099's aren't legally due until the end of Jan, so perhaps you shoudl make a separate post inquiring if other brokerages/mutual fund Adminstrators regularly produce 1099's by mid-Jan.

(sorry to hear that Vanguard is forcing the transition now, but it had to happen eventually. It's extremely inneficie :P nt and costly to continue to support multiple IT platforms....)
Realistically the question is more whether there is sufficient information fairly readily available on the brokerage account website to easily determine tax liability (even if "unofficial") before the Q4 payment is due.
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Re: Vanguard is threatening forced transition within 30 days.

Post by Serendipity »

I've never used 1099's for estimated tax purposes. I had brokerage accounts at Vanguard for years and was always able to pull what I needed from statements and/or transaction history on the website to project taxes in early January.
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Re: Vanguard is threatening forced transition within 30 days.

Post by celia »

XB70 wrote: Fri Jun 14, 2024 9:20 pm (1) After transition to all brokerage, I noticed that my Vanguard fund 1099s were delayed vs. when issued from a legacy all-Vanguard account, by two or more weeks, thus making them too late to be useable to make informed January 15 estimated tax payments.
You can log in and query your taxable accounts for dividends and gains/losses between January 1 and 15. You would likely already know if you rolled over any accounts or did Roth conversions.

Is there any other data you typically need from the 1099 before you do your taxes?
(2) After transition, automatic cross-Vanguard fund dividend investing becomes a problem. Such cross-fund dividend reallocation (use dividend of over-allocated fund to buy under-allocated fund) efforts MUST go through a settlement account for a number of days, where the price of the purchased fund is unknown until the trade date, later, NOT same day as is still possible in the legacy all-Vanguard fund accounts, same-day, fund-to-fund direct, same-day pricing, no intermediate settlement fund status. Is this fixed yet?
There is nothing to "fix" here but maybe understanding the purpose of a settlement fund will help. Basically, a settlement fund holds your cash until you invest it or receives the cash proceeds from a sale. Think of it as a temporary holding area.

When you sell a stock in your brokerage account, there is someone else on the other end who is buying it. The buyer has 2 or 3 days to get the cash into their settlement fund so it can be forwarded to you. Since there is a built-in delay in getting the money, you can't use it for another investment for a few days (during which your desired investment may change value).

Since a mutual fund is a collection of various stocks and/or bonds, I see it as all the stocks/bonds in the mutual funds are each being traded just like the individuals stocks were and each trade contributes a little bit to the delay.
(3) In what sense is this an "upgrade?" Is there a reason anymore to stay at Vanguard? What or why?
The old platform can only trade mutual funds. The upgraded brokerage accounts can trade mutual funds (including that of other companies) as well as Exchange Traded Funds (ETFs), individual stocks, bonds, CDs, and probably something I am forgetting.

Of course, you could move most of your Vanguard's funds to another company's brokerage account but it will be quite similar to the Vanguard brokerage accounts. And the hassle of using a new company will be more than just continuing with Vanguard.
Forcing my account into a "locked" status wherein I lose all settings that I will have to manually unravel and reverse seems outright HOSTILE.
Yes, you will probably have to reset some settings but you'd have to do that anyway at a new company. I don't see this as hostile if you know about it ahead of time. Now, you know.

Vanguard claims to carry excess SIPC coverage, but refuses to disclose what it is, in toto or per account, or the insurer, unlike the competition.
SIPC information

Vanguard funds can be traded and held elsewhere. Is there an advantage to holding them in a VBS account?
Some of Vanguard's mutual funds can only be held at Vanguard. (I don't recall the criteria involved. Does someone else know?)
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Re: Vanguard is threatening forced transition within 30 days.

Post by Gaston »

Big Dog wrote: Sat Jun 15, 2024 12:11 am 1099's aren't legally due until the end of Jan
I didn’t know this. I’ve never received a 1099 from Fidelity before mid-February.
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Re: Vanguard is threatening forced transition within 30 days.

Post by jebmke »

tibbitts wrote: Sat Jun 15, 2024 12:19 am
Big Dog wrote: Sat Jun 15, 2024 12:11 am 1) 1099's aren't legally due until the end of Jan, so perhaps you shoudl make a separate post inquiring if other brokerages/mutual fund Adminstrators regularly produce 1099's by mid-Jan.

(sorry to hear that Vanguard is forcing the transition now, but it had to happen eventually. It's extremely inneficie :P nt and costly to continue to support multiple IT platforms....)
Realistically the question is more whether there is sufficient information fairly readily available on the brokerage account website to easily determine tax liability (even if "unofficial") before the Q4 payment is due.
Absolutely yes for many people. I true up Q4 in early January and my pro forma 1040 is rarely off my final by much.

I can’t recall ever getting a 1099 before the January 15 Q4 payment deadline.
Last edited by jebmke on Sat Jun 15, 2024 4:50 am, edited 1 time in total.
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Re: Vanguard is threatening forced transition within 30 days.

Post by jebmke »

Gaston wrote: Sat Jun 15, 2024 3:15 am
Big Dog wrote: Sat Jun 15, 2024 12:11 am 1099's aren't legally due until the end of Jan
I didn’t know this. I’ve never received a 1099 from Fidelity before mid-February.
I think brokerage statements are allowed extra time.
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Re: Vanguard is threatening forced transition within 30 days.

Post by RickBoglehead »

Shocking it took Vanguard so long to do this.
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Re: Vanguard is threatening forced transition within 30 days.

Post by HomeStretch »

It is not surprising Vanguard is finally forcing the transition.

Consider transitioning to the brokerage platform to avoid having your account locked. Then try out Fidelity or Schwab with a small amount of $ to see if you like them better.

None of the brokerages I use (including Vanguard brokerage platform) generate a Form 1099-INT/DIV/B prior to Jan 15. I use the transaction history or the tax center or vanguard’s dividends/gains page to estimate income for my Jan. 15 tax payment. I do have to be aware of missing items like Roth conversion $ or dividends paid in early Jan. but are included in the 1099 for Dec.
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Re: Vanguard is threatening forced transition within 30 days.

Post by jeffyscott »

XB70 wrote: Fri Jun 14, 2024 9:20 pm Certainly Vanguard funds themselves have value, but it seems that the brokerage operation may not. Vanguard funds can be traded and held elsewhere. Is there an advantage to holding them in a VBS account? This is not rhetorical, I am asking--anyone? How will Vanguard's mutual company status help me now? Should I move? Where?
1. All or nearly all Vanguard mutual funds can be held elsewhere. You can also buy more elsewhere, including admiral shares of their index funds but not admiral shares of managed funds.

2. There may be transaction fees to buy more elsewhere or to sell.

3. You may not be able to do same day exchanges between Vanguard mutual funds, you might have to sell then buy the next day.

4. You certainly will not be able to direct dividends from one Vanguard fund to be invested in a different Vanguard fund.

5. You may not be able to hold any Vanguard money market fund and be limited to MMFs with much higher ERs

We left, but didn't care about 1. or 4. (we did have some admiral managed funds, but not planning to buy more) and we do not have issues 2. or 3. with our accounts elsewhere. I have to work around issue 5.

Oh, one more that I can think of, only at Vanguard can you convert mutual fund shares to ETF shares. We prefer mutual funds, so that one is not an issue for us. Also, since most of our money is in tax deferred, selling the mutual fund and buying the ETF would be an option for that portion.

Some convert their index mutual funds to ETFs before moving, this can eliminate all but issue 4. and 5.

Most common alternatives to VBS are: Fidelity, Schwab, E-trade
Fidelity and Schwab have transaction fees to buy but not to sell and some get a waiver from Schwab. E-trade has no transaction fees and I understand VMFXX is available there.

Some use Merrill Edge, but mostly that's about getting extra credit card rebates from their "preferred rewards" program. They have fees to both buy and sell Vanguard mutual funds. Those who have some assets there are typically holding ETFs and/or cash (they do offer some low expense money market funds).

I've seen Chase (formerly :?: "Chase you invest", now maybe just called "self-directed") mentioned a few times as another that, like E-trade, does not have transaction fees.
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Re: Vanguard is threatening forced transition within 30 days.

Post by rkhusky »

XB70 wrote: Fri Jun 14, 2024 9:20 pm (3) In what sense is this an "upgrade?" Is there a reason anymore to stay at Vanguard?
Why cut off your nose to spite your face?

Think of it like moving from Windows 3.1 to Windows 95, or something similar. If you move to the new platform, you have to learn a few new ways to do things and a few of your old programs won’t work. If you stay with the old platform, you eventually stop getting updates and some new programs won’t even install. You could get upset and move to Apple or Linux and learn a whole new system. But if you’re happy with Microsoft, why bother?, just accept the inevitable and upgrade.
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Re: Vanguard is threatening forced transition within 30 days.

Post by exodusing »

celia wrote: Sat Jun 15, 2024 2:58 am
XB70 wrote: Fri Jun 14, 2024 9:20 pm (1) After transition to all brokerage, I noticed that my Vanguard fund 1099s were delayed vs. when issued from a legacy all-Vanguard account, by two or more weeks, thus making them too late to be useable to make informed January 15 estimated tax payments.
You can log in and query your taxable accounts for dividends and gains/losses between January 1 and 15. You would likely already know if you rolled over any accounts or did Roth conversions.

Is there any other data you typically need from the 1099 before you do your taxes?
For international funds you don't know how much was withheld for taxes. Your taxable income from the fund is what you were paid as dividends plus the amount the fund paid in taxes.
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Re: Vanguard is threatening forced transition within 30 days.

Post by LadyGeek »

FYI - The OP is asking for help with his/her own situation. A general discussion is at Can vanguard force transition to brokerage platform?.
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Re: Vanguard is threatening forced transition within 30 days.

Post by Feldman »

It's not a threat. It's a business necessity.

What is the source of the fear around this mostly innocuous account transition?
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Re: Vanguard is threatening forced transition within 30 days.

Post by tibbitts »

exodusing wrote: Sat Jun 15, 2024 9:02 am
celia wrote: Sat Jun 15, 2024 2:58 am
XB70 wrote: Fri Jun 14, 2024 9:20 pm (1) After transition to all brokerage, I noticed that my Vanguard fund 1099s were delayed vs. when issued from a legacy all-Vanguard account, by two or more weeks, thus making them too late to be useable to make informed January 15 estimated tax payments.
You can log in and query your taxable accounts for dividends and gains/losses between January 1 and 15. You would likely already know if you rolled over any accounts or did Roth conversions.

Is there any other data you typically need from the 1099 before you do your taxes?
For international funds you don't know how much was withheld for taxes. Your taxable income from the fund is what you were paid as dividends plus the amount the fund paid in taxes.
I wasn't aware of that, maybe because my international holdings are all in deferred or Roth. Is the additional amount involved sufficiently large that it would be likely to substantially affect the Q4 estimated payment?
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Re: Vanguard is threatening forced transition within 30 days.

Post by fogalog »

XB70 wrote: Fri Jun 14, 2024 9:20 pm (2) After transition, automatic cross-Vanguard fund dividend investing becomes a problem. Such cross-fund dividend reallocation (use dividend of over-allocated fund to buy under-allocated fund) efforts MUST go through a settlement account for a number of days, where the price of the purchased fund is unknown until the trade date, later, NOT same day as is still possible in the legacy all-Vanguard fund accounts, same-day, fund-to-fund direct, same-day pricing, no intermediate settlement fund status. Is this fixed yet? If not, I wonder if other brokerages can do better. I need to inquire.
I have posted on this elsewhere but I waited to transition from mutual fund to brokerage until this was fixed. I was told it was fixed at the end of April. I transitioned around that time and, on the brokerage platform, was able to redirect dividends from fund A to fund B with, I expect, no time out of the market. Of course as others have pointed out, I will not know if this has worked until I see it in action, which I expect at the end of June. Note also that others have pointed out they could not see the option in their accounts. My guess is that Vanguard is rolling this "new" functionality in waves (very common in the SaaS world).
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Re: Vanguard is threatening forced transition within 30 days.

Post by jebmke »

exodusing wrote: Sat Jun 15, 2024 9:02 am
celia wrote: Sat Jun 15, 2024 2:58 am
XB70 wrote: Fri Jun 14, 2024 9:20 pm (1) After transition to all brokerage, I noticed that my Vanguard fund 1099s were delayed vs. when issued from a legacy all-Vanguard account, by two or more weeks, thus making them too late to be useable to make informed January 15 estimated tax payments.
You can log in and query your taxable accounts for dividends and gains/losses between January 1 and 15. You would likely already know if you rolled over any accounts or did Roth conversions.

Is there any other data you typically need from the 1099 before you do your taxes?
For international funds you don't know how much was withheld for taxes. Your taxable income from the fund is what you were paid as dividends plus the amount the fund paid in taxes.
Was this ever available prior to 1/15? I don't recall seeing it that early even on the legacy system.
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Re: Vanguard is threatening forced transition within 30 days.

Post by talzara »

jebmke wrote: Sat Jun 15, 2024 12:52 pm Was this ever available prior to 1/15? I don't recall seeing it that early even on the legacy system.
The 1099-DIV was not available prior to January 15 on the legacy platform.

In most years, the 1099-DIV was available on January 15. Sometimes in the morning, sometimes in the afternoon. You could've had only a couple of hours to calculate the estimated taxes and make the payment deadline.

In some years, the 1099-DIV wasn't available until January 16 or 17. You would've missed the deadline if you'd waited for it.

Even on the legacy platform, you shouldn't have been waiting for the 1099-DIV to make estimated tax payments. You should've been using the transaction data to do the calculations. The 1099-DIV should only be used to file your tax return.
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Re: Vanguard is threatening forced transition within 30 days.

Post by tibbitts »

fogalog wrote: Sat Jun 15, 2024 12:45 pm
XB70 wrote: Fri Jun 14, 2024 9:20 pm (2) After transition, automatic cross-Vanguard fund dividend investing becomes a problem. Such cross-fund dividend reallocation (use dividend of over-allocated fund to buy under-allocated fund) efforts MUST go through a settlement account for a number of days, where the price of the purchased fund is unknown until the trade date, later, NOT same day as is still possible in the legacy all-Vanguard fund accounts, same-day, fund-to-fund direct, same-day pricing, no intermediate settlement fund status. Is this fixed yet? If not, I wonder if other brokerages can do better. I need to inquire.
I have posted on this elsewhere but I waited to transition from mutual fund to brokerage until this was fixed. I was told it was fixed at the end of April. I transitioned around that time and, on the brokerage platform, was able to redirect dividends from fund A to fund B with, I expect, no time out of the market. Of course as others have pointed out, I will not know if this has worked until I see it in action, which I expect at the end of June. Note also that others have pointed out they could not see the option in their accounts. My guess is that Vanguard is rolling this "new" functionality in waves (very common in the SaaS world).
Apparently it's not available "upon request", since requesting hasn't helped me so far.
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Re: Vanguard is threatening forced transition within 30 days.

Post by jebmke »

talzara wrote: Sat Jun 15, 2024 1:24 pm
jebmke wrote: Sat Jun 15, 2024 12:52 pm Was this ever available prior to 1/15? I don't recall seeing it that early even on the legacy system.
The 1099-DIV was not available prior to January 15 on the legacy platform.

In most years, the 1099-DIV was available on January 15. Sometimes in the morning, sometimes in the afternoon. You could've had only a couple of hours to calculate the estimated taxes and make the payment deadline.

In some years, the 1099-DIV wasn't available until January 16 or 17. You would've missed the deadline if you'd waited for it.

Even on the legacy platform, you shouldn't have been waiting for the 1099-DIV to make estimated tax payments. You should've been using the transaction data to do the calculations. The 1099-DIV should only be used to file your tax return.
So it appears that one of the original premises of the OP is really just a red herring. That's what I thought.
When you discover that you are riding a dead horse, the best strategy is to dismount.
JeanM
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Re: Vanguard is threatening forced transition within 30 days.

Post by JeanM »

Gaston wrote: Sat Jun 15, 2024 3:15 am
Big Dog wrote: Sat Jun 15, 2024 12:11 am 1099's aren't legally due until the end of Jan
I didn’t know this. I’ve never received a 1099 from Fidelity before mid-February.
Same for me. Each year Fidelity is the last institution to send me a 1099. It always arrives mid to late February.
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nedsaid
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Re: Vanguard is threatening forced transition within 30 days.

Post by nedsaid »

I guess I am a hopeless Trekkie. As I read through this thread, I keeping thinking this:

"Resistance is futile, you will be assimilated."
A fool and his money are good for business.
prd1982
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Re: Vanguard is threatening forced transition within 30 days.

Post by prd1982 »

Big Dog wrote: Sat Jun 15, 2024 12:11 am 1) 1099's aren't legally due until the end of Jan, ...
I believe 1099-R sre required by the end of Jan
I don't think it is true for 1099-DIv or B. The IRS recognized that getting them out by the end of Jan was causing many replacements to be issued.
aristotelian
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Re: Vanguard is threatening forced transition within 30 days.

Post by aristotelian »

XB70 wrote: Fri Jun 14, 2024 9:20 pm (3) In what sense is this an "upgrade?" Is there a reason anymore to stay at Vanguard? What or why? Do I Iose or gain transfering away, or is it a wash? Forcing my account into a "locked" status wherein I lose all settings that I will have to manually unravel and reverse seems outright HOSTILE. It seems that Vanguard is saying bye, bye, and good riddance, no? Sure, Vanguard is a mutual company (its fund owners own Vanguard) vs. the for-profit competition, but given this hostility, so what? Anyone? Help.
Certainly Vanguard funds themselves have value, but it seems that the brokerage operation may not. Vanguard funds can be traded and held elsewhere. Is there an advantage to holding them in a VBS account? This is not rhetorical, I am asking--anyone? How will Vanguard's mutual company status help me now? Should I move? Where?
Vanguard has pretty much lost any comparative advantage over the competition. Fidelity offers just about everything that Vanguard does, plus better customer service with evening and weekend hours, HSA's, and banking services. The only advantage of Vanguard is their money market funds beat Fidelity's by a few basis points.

Vanguard mutual funds can be held elsewhere but they will typically charge high fees for new purchases. So if you are wedded to Vanguard mutual funds (as opposed to ETF's), you may need to stick with Vanguard. However, Fidelity has an extensive line of index mutual funds that are competitive with Vanguard's, and you can, of course, purchase Vanguard ETF's at no cost.

You have many choices as a consumer and it is easy to move from brokerage to brokerage to try them out.
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Re: Vanguard is threatening forced transition within 30 days.

Post by rkhusky »

nedsaid wrote: Sat Jun 15, 2024 8:35 pm I guess I am a hopeless Trekkie. As I read through this thread, I keeping thinking this:

"Resistance is futile, you will be assimilated."
Used to be the same angst with operating system changes. System 7 -> OS X on the Mac, and then 10.4 -> 10.5 which lost some features that people liked. Similar with Windows 3.1 -> 95, 98 -> ME and other transitions. Upgrade or get left behind. Same with telephone service. Same with cars. Same with computers. You can cling to the old technology, but it will get harder and harder to use and require more effort to maintain. And you won’t be able to get the new features that are offered
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nedsaid
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Re: Vanguard is threatening forced transition within 30 days.

Post by nedsaid »

rkhusky wrote: Sat Jun 15, 2024 9:50 pm
nedsaid wrote: Sat Jun 15, 2024 8:35 pm I guess I am a hopeless Trekkie. As I read through this thread, I keeping thinking this:

"Resistance is futile, you will be assimilated."
Used to be the same angst with operating system changes. System 7 -> OS X on the Mac, and then 10.4 -> 10.5 which lost some features that people liked. Similar with Windows 3.1 -> 95, 98 -> ME and other transitions. Upgrade or get left behind. Same with telephone service. Same with cars. Same with computers. You can cling to the old technology, but it will get harder and harder to use and require more effort to maintain. And you won’t be able to get the new features that are offered
Lots of memories here. Windows 95-->Windows 98-->Windows 98SE-->Windows XP-->Windows 7-->Windows 10--->Windows 11. And yes, I griped the whole way.
A fool and his money are good for business.
Doctor Rhythm
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Re: Vanguard is threatening forced transition within 30 days.

Post by Doctor Rhythm »

It's not a threat. It's a statement of fact.
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celia
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Re: Vanguard is threatening forced transition within 30 days.

Post by celia »

...and it's not "hostile".

OP, Look at the new features you will get instead of what you think are negative draw-backs.

New features I've seen:
* can hold more kinds of assets
* more ways to query your accounts (takes a while to get the hang of it, though)
* at least 20 years of past history can be seen
* can set more things on "automatic" (taking RMDs, pulling/pushing money from an outside account on a regular basis)
* if over 70.5, you can enter data for a QCD and the check will be mailed to you without you needing to call in
* I don't have any employer plans but I think they can now show up as part of your portfolio
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jeffyscott
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Re: Vanguard is threatening forced transition within 30 days.

Post by jeffyscott »

nedsaid wrote: Sat Jun 15, 2024 10:35 pm Lots of memories here. Windows 95-->Windows 98-->Windows 98SE-->Windows XP-->Windows 7-->Windows 10--->Windows 11. And yes, I griped the whole way.
I think Windows 7 to 10 was different from the rest, though I have never actually experienced using 10.

Instead, it was Windows 7 to Linux Mint (12 or 13 :?: ). At the time, I had read that many found that Windows to Mint transition easier than going from 7 to 10.

Not sure if that's equivalent to our choosing Vanguard MF account to Schwab brokerage vs. Vanguard MF to Vanguard brokerage, though. :mrgreen:
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Re: Vanguard is threatening forced transition within 30 days.

Post by jebmke »

celia wrote: Sun Jun 16, 2024 2:41 am ...and it's not "hostile".

OP, Look at the new features you will get instead of what you think are negative draw-backs.

New features I've seen:
* can hold more kinds of assets
* more ways to query your accounts (takes a while to get the hang of it, though)
* at least 20 years of past history can be seen
* can set more things on "automatic" (taking RMDs, pulling/pushing money from an outside account on a regular basis)
* if over 70.5, you can enter data for a QCD and the check will be mailed to you without you needing to call in
* I don't have any employer plans but I think they can now show up as part of your portfolio
And they have been signaling this for many years. When I rolled over my 401(k) in 2012?? it was not possible to open a new account on the legacy platform.
When you discover that you are riding a dead horse, the best strategy is to dismount.
VanGar+Goyle
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Re: Vanguard is threatening forced transition within 30 days.

Post by VanGar+Goyle »

exodusing wrote: Sat Jun 15, 2024 9:02 am
celia wrote: Sat Jun 15, 2024 2:58 am
XB70 wrote: Fri Jun 14, 2024 9:20 pm (1) After transition to all brokerage, I noticed that my Vanguard fund 1099s were delayed vs. when issued from a legacy all-Vanguard account, by two or more weeks, thus making them too late to be useable to make informed January 15 estimated tax payments.
Is there any other data you typically need from the 1099 before you do your taxes?
For international funds you don't know how much was withheld for taxes. Your taxable income from the fund is what you were paid as dividends plus the amount the fund paid in taxes.
The Foreign Tax Credit, and exact Qualified Dividend Income amounts may not be available until 1099 Box 1bs.
The U.S. government obligations information can also arrive after Jan 15th.
exodusing
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Re: Vanguard is threatening forced transition within 30 days.

Post by exodusing »

VanGar+Goyle wrote: Sun Jun 16, 2024 8:06 am
exodusing wrote: Sat Jun 15, 2024 9:02 am
celia wrote: Sat Jun 15, 2024 2:58 am
XB70 wrote: Fri Jun 14, 2024 9:20 pm (1) After transition to all brokerage, I noticed that my Vanguard fund 1099s were delayed vs. when issued from a legacy all-Vanguard account, by two or more weeks, thus making them too late to be useable to make informed January 15 estimated tax payments.
Is there any other data you typically need from the 1099 before you do your taxes?
For international funds you don't know how much was withheld for taxes. Your taxable income from the fund is what you were paid as dividends plus the amount the fund paid in taxes.
The Foreign Tax Credit, and exact Qualified Dividend Income amounts may not be available until 1099 Box 1bs.
The U.S. government obligations information can also arrive after Jan 15th.
For that matter, if you invest in a national muni fund you have to wait for the breakdown by state to see how much is subject to state tax if you're in a state with income tax.
exodusing
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Re: Vanguard is threatening forced transition within 30 days.

Post by exodusing »

celia wrote: Sun Jun 16, 2024 2:41 am ...and it's not "hostile".

OP, Look at the new features you will get instead of what you think are negative draw-backs.

New features I've seen:
* can hold more kinds of assets
* more ways to query your accounts (takes a while to get the hang of it, though)
* at least 20 years of past history can be seen
* can set more things on "automatic" (taking RMDs, pulling/pushing money from an outside account on a regular basis)
* if over 70.5, you can enter data for a QCD and the check will be mailed to you without you needing to call in
* I don't have any employer plans but I think they can now show up as part of your portfolio
You can have more than one account at Vanguard. If you want to, for example, hold more kinds of assets, you can open a brokerage account in addition to your mutual fund platform account.
Normchad
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Re: Vanguard is threatening forced transition within 30 days.

Post by Normchad »

Feldman wrote: Sat Jun 15, 2024 11:41 am It's not a threat. It's a business necessity.

What is the source of the fear around this mostly innocuous account transition?
I just don’t get it either. I was converted several years ago, and I can’t remember any inconveniences or harm. Honestly, I couldn’t even tell the difference. I just assumed it had to do with features that I didn’t use.

Anybody who doesn’t like their vendor, for whatever reason, probably should just switch.
Muso
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Re: Vanguard is threatening forced transition within 30 days.

Post by Muso »

nedsaid wrote: Sat Jun 15, 2024 10:35 pm
rkhusky wrote: Sat Jun 15, 2024 9:50 pm
nedsaid wrote: Sat Jun 15, 2024 8:35 pm I guess I am a hopeless Trekkie. As I read through this thread, I keeping thinking this:

"Resistance is futile, you will be assimilated."
Used to be the same angst with operating system changes. System 7 -> OS X on the Mac, and then 10.4 -> 10.5 which lost some features that people liked. Similar with Windows 3.1 -> 95, 98 -> ME and other transitions. Upgrade or get left behind. Same with telephone service. Same with cars. Same with computers. You can cling to the old technology, but it will get harder and harder to use and require more effort to maintain. And you won’t be able to get the new features that are offered
Lots of memories here. Windows 95-->Windows 98-->Windows 98SE-->Windows XP-->Windows 7-->Windows 10--->Windows 11. And yes, I griped the whole way.
Windows 95-->Windows 98-->Windows 98SE-->Windows XP :( -->OS X Leopard :happy –Snow Leopard–Lion–Mountain Lion–Mavericks–Yosemite–El Capitan–Sierra-High Sierra–Mojave–Catalina–Big Sur–Monterey–Ventura–Sonoma. :D
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Re: Vanguard is threatening forced transition within 30 days.

Post by pawtucket »

My only lingering complaint is that the old YTD statement on the mutual fund platform was very useful, and it takes some work to recreate something similar with the query tool. But alas, it is what it is. I have a small Fidelity ESSP account, and they do produce a YTD statement later in January. I wish Vanguard would do the same.
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Re: Vanguard is threatening forced transition within 30 days.

Post by jebmke »

pawtucket wrote: Sun Jun 16, 2024 9:12 am My only lingering complaint is that the old YTD statement on the mutual fund platform was very useful, and it takes some work to recreate something similar with the query tool. But alas, it is what it is. I have a small Fidelity ESSP account, and they do produce a YTD statement later in January. I wish Vanguard would do the same.
of what I use, my December statement only excludes the full year transaction history -- which was nice to have on one statement. I read somewhere in the forum that somebody was able to request this be added to their December statement for the brokerage account.
When you discover that you are riding a dead horse, the best strategy is to dismount.
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retired@50
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Re: Vanguard is threatening forced transition within 30 days.

Post by retired@50 »

XB70 wrote: Fri Jun 14, 2024 9:20 pm ...
(3) In what sense is this an "upgrade?" Is there a reason anymore to stay at Vanguard? What or why? Do I Iose or gain transfering away, or is it a wash? Forcing my account into a "locked" status wherein I lose all settings that I will have to manually unravel and reverse seems outright HOSTILE. It seems that Vanguard is saying bye, bye, and good riddance, no?
No, I don't think they are saying good riddance.

Did you object when AT&T switched from rotary dial phones to touch-tone?

This is just a natural part of a business progressing toward a simpler, more unified, approach to their own computer systems.

When you invest with Vanguard, you aren't really buying all the back end systems, processes, procedures, and the right to dictate how Vanguard provides those services, etc. You're buying inexpensive exposure to the stock and bond markets, and that hasn't changed.

Welcome to the forum.

Regards,
"All of us would be better investors if we just made fewer decisions." - Daniel Kahneman
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Re: Vanguard is threatening forced transition within 30 days.

Post by tibbitts »

Normchad wrote: Sun Jun 16, 2024 8:55 am
Feldman wrote: Sat Jun 15, 2024 11:41 am It's not a threat. It's a business necessity.

What is the source of the fear around this mostly innocuous account transition?
I just don’t get it either. I was converted several years ago, and I can’t remember any inconveniences or harm. Honestly, I couldn’t even tell the difference. I just assumed it had to do with features that I didn’t use.

Anybody who doesn’t like their vendor, for whatever reason, probably should just switch.
You weren't using features that exist on the mutual fund platform that don't exist (yet at least) on the brokerage platform. It's not a matter of "not liking" Vanguard, because there are also some features (availability of certain mutual funds) that will still exist at Vanguard that don't exist elsewhere. However I think the point is that if the new platform had been made a true superset of the old platform, we all (well, a lot of us) would have migrated long ago. For example to me it seems like Vanguard has been just as stubborn in (still) not providing the ability (that I had on the MF platform) to do a Roth conversion from fundA in a tIRA to fundB in a Roth (in one step) than I was in not migrating.
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Re: Vanguard is threatening forced transition within 30 days.

Post by MnD »

Given the magnitude of your dissatisfaction with these relatively minor changes, I think you would be far unhappier elsewhere.
At Schwab for example you see all of the things you anticipate being unhappy about plus fees to purchase Vanguard funds (but not sell them), a cash settlement fund that pays very little and compels you to trade cash back and forth into a non-sweep MM fund and 1099's that arrive in mid-late February.

Look at this as an exercise to improve your resiliency to manage things outside of your control. A lot of people experience adverse uncontrollable change on literally a daily basis. An excellent book "Poverty, by America" is very eye-opening regarding the sort of financial and other stresses continually and intentionally placed upon a large percentage of our population. I don't think you'll feel so bad about your situation after reading it. :beer
70/30 AA for life, Global market cap equity. Rebalance if fixed income <25% or >35%. Weighted ER< .10%. 5% of annual portfolio balance SWR, Proportional (to AA) withdrawals.
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Re: Vanguard is threatening forced transition within 30 days.

Post by Kenkat »

tibbitts wrote: Sun Jun 16, 2024 9:27 am You weren't using features that exist on the mutual fund platform that don't exist (yet at least) on the brokerage platform. It's not a matter of "not liking" Vanguard, because there are also some features (availability of certain mutual funds) that will still exist at Vanguard that don't exist elsewhere. However I think the point is that if the new platform had been made a true superset of the old platform, we all (well, a lot of us) would have migrated long ago. For example to me it seems like Vanguard has been just as stubborn in (still) not providing the ability (that I had on the MF platform) to do a Roth conversion from fundA in a tIRA to fundB in a Roth (in one step) than I was in not migrating.
What makes retiring legacy systems so difficult is that they are feature / function rich but technically deficient. There’s been years spent building all of this really great functionality but the underlying technical core becomes more and more obsolete. You can’t readily convert the old stuff, so it’s effectively a full re-write. So the strategy is often to stand up the new system on modernized technology, build out enough functionality to make it viable as well as new features not possible on the old platform, and then cut people over to the new platform and focus on adding the remaining functionality over time. Otherwise you wait forever to ever get off the old platform.

It’s not painless for anyone involved, but it is a difficult problem to solve.
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Re: Vanguard is threatening forced transition within 30 days.

Post by jebmke »

Kenkat wrote: Sun Jun 16, 2024 9:47 am
tibbitts wrote: Sun Jun 16, 2024 9:27 am You weren't using features that exist on the mutual fund platform that don't exist (yet at least) on the brokerage platform. It's not a matter of "not liking" Vanguard, because there are also some features (availability of certain mutual funds) that will still exist at Vanguard that don't exist elsewhere. However I think the point is that if the new platform had been made a true superset of the old platform, we all (well, a lot of us) would have migrated long ago. For example to me it seems like Vanguard has been just as stubborn in (still) not providing the ability (that I had on the MF platform) to do a Roth conversion from fundA in a tIRA to fundB in a Roth (in one step) than I was in not migrating.
What makes retiring legacy systems so difficult is that they are feature / function rich but technically deficient. There’s been years spent building all of this really great functionality but the underlying technical core becomes more and more obsolete. You can’t readily convert the old stuff, so it’s effectively a full re-write. So the strategy is often to stand up the new system on modernized technology, build out enough functionality to make it viable as well as new features not possible on the old platform, and then cut people over to the new platform and focus on adding the remaining functionality over time. Otherwise you wait forever to ever get off the old platform.

It’s not painless for anyone involved, but it is a difficult problem to solve.
and my experience with legacy business systems is that they are often either home grown or highly customized off the shelf systems that are then difficult/impossible to keep up to date, don't play well with new systems and often require a lot of humans in the background to manage. I've helped kill off a few in my day and every time we were able to reduce back-office support issues (technical and non-technical) substantially. In some cases, where it made sense, there were significant headcount reductions. In others, the service levels were increased dramatically with the existing staff.

Time will tell for VG in this regard since they still have a foot in both worlds which is sometimes the worst place to be.
When you discover that you are riding a dead horse, the best strategy is to dismount.
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XB70
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Re: Vanguard is threatening forced transition within 30 days.

Post by XB70 »

exodusing wrote: Sat Jun 15, 2024 9:02 am
celia wrote: Sat Jun 15, 2024 2:58 am
XB70 wrote: Fri Jun 14, 2024 9:20 pm (1) After transition to all brokerage, I noticed that my Vanguard fund 1099s were delayed vs. when issued from a legacy all-Vanguard account, by two or more weeks, thus making them too late to be useable to make informed January 15 estimated tax payments.
You can log in and query your taxable accounts for dividends and gains/losses between January 1 and 15. You would likely already know if you rolled over any accounts or did Roth conversions.

Is there any other data you typically need from the 1099 before you do your taxes?
For international funds you don't know how much was withheld for taxes. Your taxable income from the fund is what you were paid as dividends plus the amount the fund paid in taxes.
This is a good point!
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XB70
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Re: Vanguard is threatening forced transition within 30 days.

Post by XB70 »

tibbitts wrote: Sat Jun 15, 2024 12:02 pm
exodusing wrote: Sat Jun 15, 2024 9:02 am
celia wrote: Sat Jun 15, 2024 2:58 am
XB70 wrote: Fri Jun 14, 2024 9:20 pm (1) After transition to all brokerage, I noticed that my Vanguard fund 1099s were delayed vs. when issued from a legacy all-Vanguard account, by two or more weeks, thus making them too late to be useable to make informed January 15 estimated tax payments.
You can log in and query your taxable accounts for dividends and gains/losses between January 1 and 15. You would likely already know if you rolled over any accounts or did Roth conversions.

Is there any other data you typically need from the 1099 before you do your taxes?
For international funds you don't know how much was withheld for taxes. Your taxable income from the fund is what you were paid as dividends plus the amount the fund paid in taxes.
I wasn't aware of that, maybe because my international holdings are all in deferred or Roth. Is the additional amount involved sufficiently large that it would be likely to substantially affect the Q4 estimated payment?
Keeping international funds in a retirement account forgoes a not insubstantial foreign tax credit. I always keep international in a taxable account. If I owned any bond funds, I might put those (if taxable) into a retirement account, as their dividends are taxed at a higher rate.
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XB70
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Re: Vanguard is threatening forced transition within 30 days.

Post by XB70 »

jebmke wrote: Sat Jun 15, 2024 12:52 pm
exodusing wrote: Sat Jun 15, 2024 9:02 am
celia wrote: Sat Jun 15, 2024 2:58 am
XB70 wrote: Fri Jun 14, 2024 9:20 pm (1) After transition to all brokerage, I noticed that my Vanguard fund 1099s were delayed vs. when issued from a legacy all-Vanguard account, by two or more weeks, thus making them too late to be useable to make informed January 15 estimated tax payments.
You can log in and query your taxable accounts for dividends and gains/losses between January 1 and 15. You would likely already know if you rolled over any accounts or did Roth conversions.

Is there any other data you typically need from the 1099 before you do your taxes?
For international funds you don't know how much was withheld for taxes. Your taxable income from the fund is what you were paid as dividends plus the amount the fund paid in taxes.
Was this ever available prior to 1/15? I don't recall seeing it that early even on the legacy system.
In my case, yes. Or if not prior, on the 15th, not too late to access the info online and finish one's final estimated quarterly payment.
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anagram
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Re: Vanguard is threatening forced transition within 30 days.

Post by anagram »

celia wrote: Sun Jun 16, 2024 2:41 am ...and it's not "hostile".

OP, Look at the new features you will get instead of what you think are negative draw-backs.

New features I've seen:
* can hold more kinds of assets
* more ways to query your accounts (takes a while to get the hang of it, though)
* at least 20 years of past history can be seen
* can set more things on "automatic" (taking RMDs, pulling/pushing money from an outside account on a regular basis)
* if over 70.5, you can enter data for a QCD and the check will be mailed to you without you needing to call in
* I don't have any employer plans but I think they can now show up as part of your portfolio
It is hostile. Most of the replies are from people who think Vanguard will lower ERs as a result of the forced transition. I doubt this will happen. I also doubt Vanguard will move all current users of the mutual fund platform. What about investment advisors? What about 401k plans? What about those who cannot for professional reasons use a brokerage?

All the new features are not relevant to those who hold only Vangard mutual funds like the OP.
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anagram
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Re: Vanguard is threatening forced transition within 30 days.

Post by anagram »

pawtucket wrote: Sun Jun 16, 2024 9:12 am My only lingering complaint is that the old YTD statement on the mutual fund platform was very useful, and it takes some work to recreate something similar with the query tool. But alas, it is what it is. I have a small Fidelity ESSP account, and they do produce a YTD statement later in January. I wish Vanguard would do the same.
And Vanguard could easily do this. I guess this is one of the new features that posters think is wonderful. :oops:
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