Confusing Vanguard 1099-Div tax forms

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DaleMaley
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Confusing Vanguard 1099-Div tax forms

Post by DaleMaley » Tue Feb 14, 2017 7:52 pm

My wife's account got "upgraded" last year to a brokerage account.

She got 2 sets of 1099-Div forms. One form says "Consolidated Accounts" ....but it turns out it is not really a Total vanguard consolidated form.

I called Vanguard. Seems that if your account was upgraded during 2016...........they issued 1 set of 1099-Div to cover any dividends paid before it was upgraded..........and then issued a 2nd set of 1099-Div forms for any dividends paid after it was upgraded.

So for tax purposes, you must add the 2 sets of numbers together..............to get the total dividends to report on your tax return.

I guess the good news is that for 2017, she will get only 1 set of 1099-Div forms.

Boy, that one was confusing to me!
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livesoft
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Re: Confusing Vanguard 1099-Div tax forms

Post by livesoft » Tue Feb 14, 2017 7:59 pm

I have some sympathy, but there has been quite a lot of warning about all this already.

I don't see why one has to add anything. One just imports both tax forms into one's tax software. I don't add my Fidelity dividends to my TDAmeritrade dividends. And I don't add my Vanguard dividends to my Fidelity dividends. And I don't add my Vanguard dividends to my Vanguard dividends. I just report dividends and let tax software add them up for me.

Also note that Vanguard sent me e-mails about looking out for two 1099-DIVs. Vanguard also announced it on their splash page. Last year Vanguard got in trouble for not highlighting all this. Vanguard even got the tax-software vendors in the act. At least my tax software warns me about two different Vanguard 1099-DIVs and to import all of them.
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DaleMaley
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Re: Confusing Vanguard 1099-Div tax forms

Post by DaleMaley » Tue Feb 14, 2017 8:25 pm

Sorry LiveSoft.........I guess I am a creature of habit.

Since 1990, I have always got just one 1099-Div from Vanguard..........and it was consolidated for all mutual funds held at Vanguard.

I did not see any emails from Vanguard about this.......and Turbotax gave me no prompt about 2 1099-s from Vanguard.

I was just trying to save some people some grief.

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Most investors, both institutional and individual, will find that the best way to own common stocks is through an index fund that charges minimal fees. – Warren Buffett

Faith20879
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Re: Confusing Vanguard 1099-Div tax forms

Post by Faith20879 » Wed Feb 15, 2017 9:27 am

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We are in the exact same situation and are having to do our own consolidation. It is a real hassle. The second form was labeled "consolidated" which is quite a mislead. Hopefully next year will be easier.

livesoft
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Re: Confusing Vanguard 1099-Div tax forms

Post by livesoft » Wed Feb 15, 2017 9:36 am

It is possible that Vanguard messed up its e-mails and sent the 2-forms-warning only to folks who would get one form and neglected to send the warning to folks who actually upgraded. We have not upgraded and have only one form, yet my spouse and I both got e-mails for our joint account.
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stan1
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Re: Confusing Vanguard 1099-Div tax forms

Post by stan1 » Wed Feb 15, 2017 9:39 am

No need to add them up yourself if you are using tax software. Just enter them as two 1099s. That's how Vanguard is reporting them to the IRS.

livesoft
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Re: Confusing Vanguard 1099-Div tax forms

Post by livesoft » Wed Feb 15, 2017 9:44 am

stan1 wrote:No need to add them up yourself if you are using tax software. Just enter them as two 1099s. That's how Vanguard is reporting them to the IRS.
Right. It is kind of like getting an 1099-INT from Ally and a 1099-INT from your other bank. I'll bet you never worried about having two 1099-INTs.
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Faith20879
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Re: Confusing Vanguard 1099-Div tax forms

Post by Faith20879 » Wed Feb 15, 2017 9:59 am

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We've always only received one form in the past.

Like Dale, we didn't receive any email. Got the first form in January and the reported dividends did not match with my records. The second form arrived in February with the label "consolidated", I thought great now I can use this form instead. But, as it turned out the second form also only just contain partial and was not consolidated.

Thanks for the tip about entering as two 1099s. We are still using the hi-tech of paper and pencil. Guess we got what we paid for, ha.

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Re: Confusing Vanguard 1099-Div tax forms

Post by BHUser27 » Wed Feb 15, 2017 12:57 pm

OP - are you sure the second form was called "Consolidated Accounts" or did it say "Consolidated Form 1099"

I believe this is how it works...

The "Consolidated Form 1099" is what brokerage accounts receive. It can include 1099-DIV, 1099-INT, 1099-B figures in one PDF, depending on your investments. It is "consolidated" in that it includes -DIV, -INT, -B in one doc.

The 1099-DIV you got is only a "-DIV". It is what you were used to getting in a mutual-fund-only account. And depending on your account activity, you might have received a separate 1099-INT as well.

The only reason you got two is that you had two different accounts in the same year. So you get the stand-alone "-DIV" for the time you had a mutual-fund-only account, and you got the 'Consolidated 1099' for the time you had a Brokerage account. Going forward you will only get the 'Consolidated 1099 form'.

There is some additional discussion in the last few posts of this thread...
viewtopic.php?f=10&t=208752&newpost=323 ... 0#p3238306

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DaleMaley
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Re: Confusing Vanguard 1099-Div tax forms

Post by DaleMaley » Sat Feb 18, 2017 9:39 am

Today, when I logged into Vanguard's web site............they have a big notice about getting 2 tax forms. I must not have been the only one who was confused about this.........

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arunbaheti
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Re: Confusing Vanguard 1099-Div tax forms

Post by arunbaheti » Thu Feb 22, 2018 2:45 pm

The logic of using both sets (individual accounts for part of the year, consolidated brokerage for part of the year) makes sense and my tax software can download them. The confusion is from Vanguard's wording "state and local taxes", implying maybe not for federal? And "may"? Seems pretty clear you need to report all your income to all relevant tax authorities.

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