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Taxes

Tax forms you may receive

Many investment tax forms sound pretty similar. Make sure you know which ones you need and what to do with them.
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Points to know

  • 1099 forms report income (including investment income) to you and the IRS.
  • Other forms are less common, but you may receive them for certain transactions or types of investments.

1099 forms

In general, 1099 forms report income other than wages. There are several types of 1099 forms.

As an investor, you might receive these forms:

  • 1099-B, which reports capital gains and losses.
  • 1099-DIV, which reports dividend income and capital gains distributions.
  • 1099-INT, which reports interest income.
  • 1099-R, which reports distributions from retirement accounts.

Other types of 1099 forms are less common, but you might receive them if you invest in certain types of securities or accounts, or if you perform certain transactions. These include:

  • 1099-MISC, which reports substitute payments in lieu of dividends.
  • 1099-OID, which reports any original issue discount (OID) from debt obligations, including Treasury Inflation-Protected Securities (TIPS).
  • 1099-Q, which reports distributions, including transfers to another financial institution, from education savings accounts (ESAs) and 529 accounts.

Learn more about these forms and when you'll receive them

Capital gain

The difference between the sale price of an asset — such as a mutual fund, stock, or bond — and the original cost of the asset.

Dividend

The distribution of the interest or income produced by a mutual fund's holdings to the fund's shareholders, or a payment of cash or stock from a company's earnings to each stockholder. Dividends can be distributed monthly, quarterly, semiannually, or annually.

Interest

The amount or rate charged when money is borrowed. For example, when you invest in bonds, you receive interest payments from the bond's issuer.

529 savings plan

A type of investment account that offers federal and state tax benefits to people saving for higher education. These plans are sponsored by particular states but are usually open to anyone. The money in a 529 savings plan can be used for tuition and other qualified higher education expenses at thousands of colleges, universities, graduate schools, and trade and technical schools in the United States and abroad. You can also use your 529 assets for K–12 tuition of up to $10,000 per student per year for enrollment or attendance at a public, private, or religious school.

Bond

A debt security (IOU) issued by a corporation, government, or government agency in exchange for the money the bondholder lends it. In most instances, the issuer agrees to pay back the loan by a specific date and make regular interest payments until that date.

Mutual fund

A type of investment that pools shareholder money and invests it in a variety of securities. Each investor owns shares of the fund and can buy or sell these shares at any time. Mutual funds are typically more diversified, low-cost, and convenient than investing in individual securities, and they're professionally managed.

IRA

A type of retirement savings account. Two popular types of IRAs are the traditional IRA and Roth IRA. You may contribute to these IRAs only if you (or your spouse) have earned income. The main advantage of a traditional IRA is the opportunity to contribute pre-tax dollars. Roth IRAs are popular because, while contributions consist of after-tax dollars, the earnings on the account are tax-free, and you're not required to distribute the assets during your lifetime. For both IRAs, distributions of untaxed assets (contributions and earnings for a traditional IRA; earnings for a Roth IRA) before age 59½ are generally subject to a 10% penalty tax.

Roth IRA

A type of IRA that lets an investor save up to a certain amount of after-tax dollars each year. The earnings in the account grow tax-free, and distributions taken after age 59½ (if the account has been open at least 5 years) are exempt from taxes.

GOOD TO KNOW

The forms you receive may differ depending on whether you invest through funds or individual securities. For example, interest from individual bonds is reported on Form 1099-INT, but interest from bonds held through a mutual fund is called an "interest dividend" and reported on Form 1099-DIV.

Other tax forms

There are several other forms you might receive from Vanguard. Here are the most common.

  • Form 5498, which includes information about transactions in traditional IRAs, Roth IRAs, SEP IRAs, and SIMPLE IRAs.
  • Form 5498-ESA, which includes information about contributions to education savings accounts (ESAs).
  • Form 1042-S, which reports information about investment income and distributions for accounts owned by nonresident aliens.

Learn more about these forms and when you'll receive them

GOOD TO KNOW

You can find information for specific Vanguard funds that you may need for your tax reporting, including information about fund distributions, qualified dividends, intercorporate dividends, and income from government obligations.

See tax information for Vanguard funds >

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Most tax forms are required to be provided only for amounts of $10 or more, or if taxes have been previously withheld. However, you must report any investment income or distributions you receive to the IRS. All investment income or distributions during the year are reported on your year-end mutual fund or brokerage account statement.

Vanguard's advice services are provided by Vanguard Advisers, Inc. ("VAI"), a registered investment advisor, or by Vanguard National Trust Company ("VNTC"), a federally chartered, limited-purpose trust company.

The services provided to clients will vary based upon the service selected, including management, fees, eligibility, and access to an advisor. Find VAI's Form CRS and each program's advisory brochure here for an overview.

VAI and VNTC are subsidiaries of The Vanguard Group, Inc., and affiliates of Vanguard Marketing Corporation. Neither VAI, VNTC, nor its affiliates guarantee profits or protection from losses.