Robinhood has changed the landscape of investing. It was the first platform to offer commission-free trading of stocks, and it made buying and selling stocks feel like a game. This focus has attracted many new investors. But investing in the stock market will inevitably complicate your tax season. Robinhood makes every effort to provide you with all necessary documents in time, and they are called 1099. But when does Robinhood send 1099 Tax Documents to you?
I will share some details about those 1099 Tax Documents in this post. I will clarify what they contain, when you need to include them, and how you can save the most money. Knowing what you can expect as a Robinhood user is good to know.
Let’s make navigating tax season a breeze for you!
Do you like Robinhood and want to get the most out of it? Take a look at our other articles about Robinhood:
What Tax Documents Does Robinhood Send?
Robinhood will provide you with all the tax documents you need to file your individual tax return to the Internal Revenue Service on time. This includes Form 1099-DIV, Form 1099-INT, 1099-R, and Form 1099-B. You’ll receive these tax documents no later than February 16 in any calendar year. Robinhood combines most Form 1099 versions into a single PDF file, except for the 1099-R for retirement income. If you did any cryptocurrency trades, you’ll also have them included in the 1099.
- Form 1099-DIV – This form contains all your dividend payments.
- Form 1099-INT – If you received interest payments, they are contained in this form.
- Form 1099-R – If you have a retirement account with Robinhood, this form contains the information on that account.
- Form 1099-B – Any sold stocks or other securities are contained in this form, regardless of whether the sale created capital losses or a gain.
How Do You Access Your Tax Documents On Robinhood?
All your tax documents are located in the Tax Center in the Robinhood app. Robinhood users can easily access them like this:
- Select Account → Menu (3 bars) or Settings (gear)
- Go to the Tax Center
- Select a form to review its details
You will also be able to access all tax documents from prior years.
When Does Robinhood Send 1099 Tax Documents?
Robinhood will determine if you will need to file taxes. It will check your qualified dividends income and transaction history for you. If you are not required to report taxes, Robinhood will not send a Form 1099. You will get an email notification from the Robinhood platform if new tax documents become available for a tax year.
On What Do You Have To Pay Taxes On Robinhood?
Anything that creates a so-called taxable event. This includes earning a dividend, selling stock on a profit, option trading, and earning interest on cash or other Robinhood securities. If you participate in the Robinhood Cash Sweep Program, your earned interest creates taxable events that must be included on your tax report. Not that when you own a Robinhood Cash Card (aka Robinhood spending account), the cash-back does not create a taxable event. The IRS treats cash-back rewards as a rebate on spending and not as income, so you aren’t required to pay income tax on these rewards.
Long-term vs. Short-Term Capital Gains
The IRS rules are designed to encourage you to hold your stocks for at least 1 year. You have an incentive to do that as you will pay a lower tax rate. This is the difference between short-term capital gain and long-term capital gain. Any gain you realize by selling your stock, mutual fund, or exchange-traded fund (ETF) will fall into one of these categories.
Any stock sale that falls into the short-term gains category will be taxed as your ordinary income.
| Filing Status | 10% Rate | 12% Rate | 22% Rate | 24% Rate | 32% Rate | 35% Rate | 37% Rate | |
|---|---|---|---|---|---|---|---|---|
| Single | $0 – $11,000 | $11,001 – $44,725 | $44,726 – $95,375 | $95,376– $182,100 | $182,101– $231,250 | $231,251– $578,125 | $578,125+ | |
| Married filing jointly | $0 – $22,000 | $22,001 – $89,450 | $89,451 – $190,750 | $190,751– $364,200 | $364,201– $462,500 | $462,501– $693,750 | $693,750+ | |
| Married filing separately | $0 – $11,000 | $11,001 – $44,725 | $44,726 – $95,375 | $95,376– $182,100 | $182,101– $231,250 | $231,251– $346,875 | $346,875+ | |
| Head of household | $0 – $15,700 | $15,701 – $59,850 | $59,851 – $95,350 | $95,351– $182,100 | $182,101– $231,250 | $231,251– $578,100 | $578,100+ |
Short-term capital gains tax rates for the 2023 calendar year
Look at the table below for how much taxes you pay if your sale falls into the long-term capital gains tax category.
| Filing Status | 0% Rate | 15% Rate | 20% Rate |
|---|---|---|---|
| Single | $0 – $44,625 | $44,626 – $492,300 | $492,300+ |
| Married filing jointly | $0 – $89,250 | $89,251 – $553,850 | $553,850+ |
| Married filing separately | $0 – $44,625 | $44,626 – $276,900 | $276,900+ |
| Head of household | $0 – $59,750 | $59,751 – $523,050 | $523,050+ |
Long-term capital gains tax rates for the 2023 calendar year
As you can see, the difference in taxes can be quite significant for your investment income.
If you are unsure what category your capital gains fall into, consult with a tax professional to assess your personal situation. Remember that your state can also have a set of tax rules. You might owe additional state taxes on your investment activity.
To learn more about this topic, look at my guide “Do You Have To Report Stocks on Taxes With Robinhood?“
Do You Pay Taxes When You Lose Money On Robinhood?
Losing money when selling stocks is not considered a taxable event, thus Robinhood will not include them in the 1099 Tax Documents. But what if you have a combination of capital losses and capital gains? In this situation, you might be able to offset your gains with your losses to reduce your taxable income.
Let’s assume you made two short-term sales in one year. The first produces a gain of $300, and the second has a loss of $100. You can now offset your gain by your loss and only pay short-term capital gains taxes on $200.
Keep the Wash Sale Rule In Mind
The Wash Sale Rule states that if you sell an investment at a loss and repurchase it within 30 days, you cannot claim that loss for tax purposes. Doing so does not come with a penalty for you. But it creates a tax disadvantage for you. Remember that this also applies if a family member or a company you own repurchases these investments. So, wait 30 days after selling at a loss if you plan to buy your stocks back.
Do You Have To Pay Taxes For Cryptocurrency?
Trading cryptocurrencies is popular on Robinhood Crypto. Any cryptocurrency is viewed by the IRS as property to calculate the federal income tax.
The IRS has released some guidelines on that:
You must report any gain or loss from selling cryptocurrencies to the IRS in your tax return. Robinhood will include the necessary information in the 1099 Tax Documents.
It is important to note that the Cryptocurrency environment is still undergoing many changes. You should always be on the lookout for any changes in the tax code.
Do You Have To Pay Quarterly Tax Estimates?
What are Quarterly Tax Estimates:
You must pay quarterly estimated taxes if you expect to owe $1,000 or more in a given tax year. Not doing so will get you a penalty for every missed month.
There are 4 deadlines in the year to make those payments (they can be different for other tax years!):
| Q1 | Q2 | Q3 | Q4 |
|---|---|---|---|
| January 17 | April 18 | June 15 | September 15 |
Quarterly Tax Estimate Deadlines 2023
To learn more about Quarterly Tax Estimates, head over to this post: How To Pay Your Tax On Robinhood Stocks – Investor Guide
You should talk to a financial advisor and tax professional if your tax situation becomes more complex. Finding a good financial advisor is not easy. I recommend the Garrett Planning Network, the National Association of Personal Financial Advisors (NAPFA), and the XY Planning Network. These networks can get you in contact with a fee-only advisor. No matter how much money we are talking about, it will not change your costs.
Final Thoughts – When Does Robinhood Send 1099 Tax Documents To You?
Almost all the information this post provides also applies if you use a different brokerage service or investment app.
In this post, you learned what tax documents are sent out by Robinhood. You also learned what they mean and when you will receive them to do your individual tax report on time. If you trade cryptocurrencies on Robinhood, you now also know their tax treatment.
Additionally, you now know the difference between long-term gains and short-term gains. This knowledge can help you navigate tax season more confidently and possibly lower your tax bill.
Disclaimer: The information in this blog post should not be considered tax advice or a replacement. They are solely provided for informational purposes. Please consult with a tax professional for any specific questions on your taxes.
