Tax-filing information for your Vanguard accounts | Vanguard (2024)

FAQs

Do I have to pay taxes on my Vanguard account? ›

Yes, the holding period matters. If you've owned your investment for more than 1 year before selling at a gain, you're subject to long-term capital gains tax rates. If you've owned your investment for one year or less before selling at a gain, you're taxed at short-term capital gains rates.

What's reported for my mutual fund sales? You remain responsible for reporting your cost basis information to the IRS on Form 8949 and on Form 1040, Schedule D, for all shares sold, whether they're covered or noncovered.

Steps to file your federal tax return

A W-2 form from each employer. Other earning and interest statements (1099 and 1099-INT forms) Receipts for charitable donations; mortgage interest; state and local taxes; medical and business expenses; and other tax-deductible expenses if you are itemizing your return.

NEW YORK, July 6 (Reuters) - Vanguard Group, the largest mutual fund company, on Wednesday reached a $6.25 million settlement to resolve regulatory charges it failed to warn many fund investors that they would face surprisingly big tax bills.

You'll get a 1099-DIV each year you receive a dividend distribution, capital gains distribution, or foreign taxes paid for your taxable investments. But if the amount is less than $10 for the year, no 1099-DIV is sent.

Any income you earn in a taxable brokerage account is taxed when the income is realized. If you sell a stock at a gain, that gain is taxable. If you earn interest on your cash balance, that interest income is taxable in the tax year in which it was received.

If you don't report the cost basis, the IRS just assumes that the basis is $0 and so the stock's sale proceeds are fully taxable, maybe even at a higher short-term rate. The IRS may think you owe thousands or even tens of thousands more in taxes and wonder why you haven't paid up.

Just as with individual securities, when you sell shares of a mutual fund or ETF (exchange-traded fund) for a profit, you'll owe taxes on that "realized gain." But you may also owe taxes if the fund realizes a gain by selling a security for more than the original purchase price—even if you haven't sold any shares.

Your Vanguard Personal Investor annual tax statements

This statement provides you with a consolidated view of your investments, income distributions and capital gains tax for the financial year.

Do You Have to File Taxes If You Made Less than $5,000? Typically, if a filer files less than $5,000 per year, they don't need to do any filing for the IRS. Your employment status can also be used to determine if you're making less than $5,000.

Do I need my 401k info for taxes? ›

401k contributions are made pre-tax. As such, they are not included in your taxable income. However, if a person takes distributions from their 401k, then by law that income has to be reported on their tax return in order to ensure that the correct amount of taxes will be paid.

Personal Documents

Your social security number or Individual Taxpayer Identification Number (ITIN), as well as those of anyone you may be claiming on your tax return, including your spouse if you are filing jointly. Photo identification.

When the market cratered, investors withdrew $16.4 billion from Vanguard's index mutual funds. What accounts for remaining index mutual fund outflows? Johnson says it could be clients pulling out money because they're retiring, or because they're negatively affected by the pandemic.

Vanguard Total's odds of distress is under 20% at this time. It has slight probability of undergoing some form of financial straits in the near future. Chance of distress shows the probability of financial torment over the next two years of operations under current economic and market conditions.

Any returns are free from income tax and capital gains tax.

In addition to being 100% exempt from federal income taxes, interest dividends from Vanguard state-specific municipal bond funds (listed below) may be exempt from state taxes to resident shareholders of that state, except where noted.

The simplest way to avoid this is to own mutual funds in tax-advantaged retirement accounts such as IRAs and 401(k)s. You can also make sure to hold the investments for the long term, so that if you do owe taxes, you'll pay them at the lower long-term capital gains rate.