Tax forms for newly opened brokerage account

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pasadena
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Tax forms for newly opened brokerage account

Post by pasadena » Tue Jan 17, 2017 6:35 pm

Hello !

I opened my (only) brokerage account at Vanguard last July. From July to now, I have only bought funds, and haven't sold anything. I did convert to admiral shares in October. I did get dividends.

Vanguard says that they will send out forms for brokerage accounts by end of February. Do I have to wait until I receive them, or can I file my taxes earlier by simply adding up the dividends I received and entering them manually in TurboTax ?

I use e-file for both federal and state (CA).

Thank you

mhalley
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Re: Tax forms for newly opened brokerage account

Post by mhalley » Tue Jan 17, 2017 6:45 pm

There is always the chance that you might be off if you file before getting your form 1099 div. this could result in having to file an amended return.
http://www.cnbc.com/2015/04/27/how-to-f ... eturn.html
https://www.taxact.com/tax-information/ ... return.asp
Edelmens recommends waiting until the end of march to avoid hassles of the amended tax forms.
http://www.edelmanfinancial.com/educati ... d-of-march
Are you getting a large refund? If so, perhaps you should adjust your w4.
Last edited by mhalley on Tue Jan 17, 2017 6:49 pm, edited 1 time in total.

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oldcomputerguy
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Re: Tax forms for newly opened brokerage account

Post by oldcomputerguy » Tue Jan 17, 2017 6:46 pm

Wait for the forms. Simply adding up the dividends you see on your statements will give an idea of how much total you received, but that won't tell you whether or not they are qualified dividends. Qualified dividends are taxed at a lower rate, so if any of your dividends were qualified, you definitely want to know about it.

Also, I think there is a bit of a legal safety net in using the "official" forms from the broker, as those are the numbers they are reporting to the IRS, and you for sure don't want to have a discrepancy.
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Flobes
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Re: Tax forms for newly opened brokerage account

Post by Flobes » Tue Jan 17, 2017 6:47 pm

pasadena wrote:...or can I file my taxes earlier by simply adding up the dividends I received and entering them manually in TurboTax ?
It depends.

Several important things won't be known until you get the 1099s. Examples:
- The 1099 will show the amount of qualified vs unqualified dividends. This may differ from earlier estimates.
- The 1099 for International funds will be greater than the sum of your dividends, because of foreign tax payments. The 1099 will show the total eligible for Foreign Tax Credit.

I always wait. And there's usually a surprise...
Last edited by Flobes on Tue Jan 17, 2017 6:49 pm, edited 1 time in total.

livesoft
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Re: Tax forms for newly opened brokerage account

Post by livesoft » Tue Jan 17, 2017 6:48 pm

Please wait. Then wait some more for the corrected forms. Then wait even more for the corrections to the corrected forms. After all, we're talking about Vanguard here.

I file in October after filing for an extension in April. Everybody should do that.
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Geologist
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Re: Tax forms for newly opened brokerage account

Post by Geologist » Tue Jan 17, 2017 6:52 pm

Aside from qualified dividends, you might have dividends partly from Treasuries that might not be taxable in your state (true for some bond funds).

dbr
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Re: Tax forms for newly opened brokerage account

Post by dbr » Tue Jan 17, 2017 7:19 pm

It is easy to download and auto-fill your TurboTax forms directly from your broker. No errors (hah!), all the details filled in, and perfect compliance between the 1099 data the IRS will get and what you report. The same applies for interest, asset trading etc.

boglephreak
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Re: Tax forms for newly opened brokerage account

Post by boglephreak » Tue Jan 17, 2017 7:46 pm

livesoft wrote:Please wait. Then wait some more for the corrected forms. Then wait even more for the corrections to the corrected forms. After all, we're talking about Vanguard here.

I file in October after filing for an extension in April. Everybody should do that.
is it really that bad with Vanguard? i prefer not to delay things like this, but have zero desire to file an amended return.

livesoft
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Re: Tax forms for newly opened brokerage account

Post by livesoft » Tue Jan 17, 2017 7:47 pm

For most people, it is not that bad.
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Re: Tax forms for newly opened brokerage account

Post by Geologist » Tue Jan 17, 2017 7:56 pm

boglephreak wrote:
livesoft wrote:Please wait. Then wait some more for the corrected forms. Then wait even more for the corrections to the corrected forms. After all, we're talking about Vanguard here.

I file in October after filing for an extension in April. Everybody should do that.
is it really that bad with Vanguard? i prefer not to delay things like this, but have zero desire to file an amended return.
Other brokers send out corrected forms too.

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Re: Tax forms for newly opened brokerage account

Post by acanthurus » Tue Jan 17, 2017 8:31 pm

Removed
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carolinaman
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Re: Tax forms for newly opened brokerage account

Post by carolinaman » Wed Jan 18, 2017 8:22 am

It would seem the longer you wait to file your taxes with IRS, the greater the risk someone will file against your account. I have everything I need to file right now except for the breakdown of dividends from the etf VTI. Last year, 99.5% of dividends were qualified. I am tempted to estimate my qualified dividents and go ahead and file. Worst case is that I have to amend return which is no big deal. What are others thoughts about this approach?

pasadena
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Re: Tax forms for newly opened brokerage account

Post by pasadena » Thu Jan 19, 2017 10:56 pm

Thanks everyone. I will just play with it and wait for the forms before I finalize and file.

I knew it was a bad idea, but I needed someone to tell me :)

*3!4!/5!
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Re: Tax forms for newly opened brokerage account

Post by *3!4!/5! » Thu Jan 19, 2017 11:06 pm

All the numbers I need can be found in my Vanguard account right now. I'm not waiting for forms. I'll file ASAP. I want that big fat refund check. (And I don't want crooks to frontrun my SSN.)

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oneleaf
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Re: Tax forms for newly opened brokerage account

Post by oneleaf » Fri Jan 20, 2017 1:22 am

Is it even possible to know the dividends for international funds before the tax forms come out? You can see the dividends paid to you, but the reported amount will be higher on the 1099-DIV which then has the foreign taxes paid line that accounts for the difference. AFAIK, no way to know the numbers until you get the forms right?

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Re: Tax forms for newly opened brokerage account

Post by triceratop » Fri Jan 20, 2017 1:29 am

*3!4!/5! wrote:All the numbers I need can be found in my Vanguard account right now. I'm not waiting for forms. I'll file ASAP. I want that big fat refund check. (And I don't want crooks to frontrun my SSN.)
Unless you own entirely bond funds this is highly unlikely.
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Re: Tax forms for newly opened brokerage account

Post by *3!4!/5! » Fri Jan 20, 2017 2:51 am

triceratop wrote:
*3!4!/5! wrote:All the numbers I need can be found in my Vanguard account right now. I'm not waiting for forms. I'll file ASAP. I want that big fat refund check. (And I don't want crooks to frontrun my SSN.)
Unless you own entirely bond funds this is highly unlikely.
I know the exact amount of dividends, so that's all that's needed. It's irrelevant how much is qualified, as that has no effect on my taxes (confirmed by software), so I just say $0 qualified since it makes no difference.

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Re: Tax forms for newly opened brokerage account

Post by carolinaman » Fri Jan 20, 2017 7:33 am

*3!4!/5! wrote:
triceratop wrote:
*3!4!/5! wrote:All the numbers I need can be found in my Vanguard account right now. I'm not waiting for forms. I'll file ASAP. I want that big fat refund check. (And I don't want crooks to frontrun my SSN.)
Unless you own entirely bond funds this is highly unlikely.
I know the exact amount of dividends, so that's all that's needed. It's irrelevant how much is qualified, as that has no effect on my taxes (confirmed by software), so I just say $0 qualified since it makes no difference.
Qualified dividends make a difference to me and I suspect most taxpayers because they pay the same taxes as capital gains whereas ordinary dividends pay the ordinary tax rate. For me, it is paying 15% of qualified dividends instead of 25%.

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Re: Tax forms for newly opened brokerage account

Post by *3!4!/5! » Fri Jan 20, 2017 10:58 am

carolinaman wrote:
*3!4!/5! wrote:
triceratop wrote:
*3!4!/5! wrote:All the numbers I need can be found in my Vanguard account right now. I'm not waiting for forms. I'll file ASAP. I want that big fat refund check. (And I don't want crooks to frontrun my SSN.)
Unless you own entirely bond funds this is highly unlikely.
I know the exact amount of dividends, so that's all that's needed. It's irrelevant how much is qualified, as that has no effect on my taxes (confirmed by software), so I just say $0 qualified since it makes no difference.
Qualified dividends make a difference to me and I suspect most taxpayers because they pay the same taxes as capital gains whereas ordinary dividends pay the ordinary tax rate. For me, it is paying 15% of qualified dividends instead of 25%.
Right. They just don't make a difference to me.

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House Blend
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Re: Tax forms for newly opened brokerage account

Post by House Blend » Fri Jan 20, 2017 11:35 am

oneleaf wrote:Is it even possible to know the dividends for international funds before the tax forms come out? You can see the dividends paid to you, but the reported amount will be higher on the 1099-DIV which then has the foreign taxes paid line that accounts for the difference. AFAIK, no way to know the numbers until you get the forms right?
Right. Those of us with international investments in taxable will have to wait a while longer before we'll know how much income we'll have to report.

I believe that VG investors will be able to download the percentages and crunch the numbers themselves in the next week or two, but probably still better to wait for the 1099.

FWIW, the qualified dividend percentages for Vanguard funds have been finalized now for 2016 and are available for download. The one that had tax geek's knickers in a twist was Total Stock Market. That one clocked in at 92.75% QDI.
https://advisors.vanguard.com/VGApp/iip ... endfigures

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Re: Tax forms for newly opened brokerage account

Post by boglesmind » Fri Jan 20, 2017 12:04 pm

boglephreak wrote:
livesoft wrote:Please wait. Then wait some more for the corrected forms. Then wait even more for the corrections to the corrected forms. After all, we're talking about Vanguard here.

I file in October after filing for an extension in April. Everybody should do that.
is it really that bad with Vanguard? i prefer not to delay things like this, but have zero desire to file an amended return.
I file in early April most of the time. In the last 20+ years, I received corrected 1099s twice or thrice (and received two corrections in the same year once) from Vanguard and other brokerages and the corrections were small. YMMV.

Already received 1099-DIV and 1099-B (dated 16th and 17th Jan 2017) for the 2016 tax year for my Vanguard mutual funds accounts. Looking forward to receiving a single consolidated 1099 from Vanguard next year . Yay!

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Re: Tax forms for newly opened brokerage account

Post by grabiner » Fri Jan 20, 2017 9:59 pm

carolinaman wrote:It would seem the longer you wait to file your taxes with IRS, the greater the risk someone will file against your account.
The best defense against this is to adjust your withholding so that you have a small amount due, rather than a refund. This also protects against the more common risk of something going wrong and your refund being held up until it gets straightened out. I have had three state refunds delayed because of errors (two by the state, one in which I paid the right tax but copied an intermediate number wrong).
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Re: Tax forms for newly opened brokerage account

Post by JGoneRiding » Sat Jan 21, 2017 12:03 pm

I am waiting. I did what the OP was suggesting for all my standard 1099-INT forms but I wont for brokerage. and 1099-OID its just to hard to get it right. It always comes out weird--I rarely amend though usually the changes are to small to matter. I just need that one and the one from Prosper and I am good! :) oh and I guess one donation letter that hasn't come yet for some reason

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GerryL
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Re: Tax forms for newly opened brokerage account

Post by GerryL » Sat Jan 21, 2017 4:06 pm

While waiting for the forms to come from the brokerage account I make sure I have all my paperwork organized. Then I get the software I intend to use as soon as I see a good sale price. (This year it was Digital Day at Amazon.) I start filling in the forms with the real info that I have and estimates of info that will be on forms yet to be received. This way I should have everything ready to go when the forms from the brokerage accounts come in. Just need to revise the remaining estimates and file -- and that can be done in very short order.

pasadena
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Re: Tax forms for newly opened brokerage account

Post by pasadena » Sat Jan 21, 2017 4:33 pm

GerryL wrote:I start filling in the forms with the real info that I have and estimates of info that will be on forms yet to be received. This way I should have everything ready to go when the forms from the brokerage accounts come in. Just need to revise the remaining estimates and file -- and that can be done in very short order.
Yes that's what I did today. Now just waiting for my HSA forms (should have them next week), and Vanguard's, expected by end of Feb. Up until now I always filed on the first possible day. I guess from now on, it'll be March 1st instead of Feb 1st :)

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heartwood
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Re: Tax forms for newly opened brokerage account

Post by heartwood » Mon Jan 23, 2017 3:40 pm

You might check back at Vanguard. I see that all my tax forms for all my accounts are now posted. The ones I converted have all the information for the "old" account and also for the new "upgraded" account.

It's January 23, so they're way ahead of the February date. YMMV.

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