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Help for your common tax questions

Here are answers to some questions we've received from clients recently, along with links to additional information and helpful resources.

General tax questions

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When are taxes due?

In general, taxes are due on April 15. However, the IRS deadline for filing 2020 taxes and making 2020 IRA contributions has been extended to May 17, 2021.

Due to harsh winter storms, residents of Texas, Oklahoma, and Louisiana have until June 15, 2021 to file 2020 taxes. Depending on your specific situation, you may want to consult a tax professional.

When will I get my Vanguard mutual fund or brokerage tax forms?

You can expect your forms starting in late January through the end of February. Please visit our tax forms page to learn when specific tax forms will be ready.

If you've added tax forms to your Vanguard e-service package, you won't receive paper copies. Instead, we'll send you an email as soon as the forms are available online in your secure Tax Center.

If you still receive paper copies of your tax forms by mail, you should get them shortly after they're posted online.

Notes about Form 1099-DIV and Form 1099-B

  • You won't see any dividend or capital gains distributions for your investment if the total amount for the year was less than $10, unless you had taxes withheld.
  • If you own Vanguard Real Estate Index Fund, you'll receive your Form 1099-DIV and Form 1099-B, if applicable, for this fund in February 2021 when the fund's return of capital is calculated.
  • If you own Vanguard Managed Allocation Fund, you'll receive your Form 1099-DIV and Form 1099-B, if applicable, for this fund in February 2021 when all income reallocations are completed.

Why am I receiving two 1099 tax forms?

If you upgraded to a Vanguard Brokerage Account in 2020, you may receive two sets of 2020 tax forms: one set in January (for your mutual fund accounts) and another set in February (for your brokerage account). You may need both to report your state and local tax liability.

With a few exceptions, in future tax years you'll likely receive one 1099 Consolidated Form for all of your mutual fund and brokerage holdings.

How are Vanguard wire fees handled?

  • For mutual fund accounts, we assess the wire fee in addition to your redemption proceeds. That means you'll see a separate $10 redemption amount on your Form 1099-B, 1099-R, or 1099-Q. However, if you redeemed your entire fund balance, we reduced your redemption proceeds by the fee amount.
  • For brokerage accounts, we reduced your redemption proceeds by the fee amount.

What should I do if I've forgotten my vanguard.com user name and password?

If you've forgotten your password, your user name, or both, you can go to our logon page for help. Once you verify your identity, you can create a new user name and password. You can then access your account using the updated user name and password.

Visit our Security Center »

Tax questions for retirement accounts

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What's the deadline for making an IRA contribution for the 2020 tax year?

Provided you meet the eligibility requirements and you're still under the annual contribution limit, , the last day to make a contribution to an existing IRA for the 2020 tax year is Monday, May 17, 2021.

Due to harsh winter storms, residents of Texas, Oklahoma, and Louisiana have until June 15, 2021 to make 2020 IRA contributions.

When making your contribution, please indicate whether it's for the 2020 or 2021 tax year.

Compare IRA types and their tax benefits

Investing online?

Investing by Mail?

Before sending us a contribution check, please be sure to include a purchase slip. Here are the steps to follow to make sure that we receive your IRA contribution check and are able to process it:

1. Log on to your Vanguard account.
2. From the menu, choose My Accounts, select Buy & sell, and follow the instructions.

How much can I contribute to my retirement account?

For the 2020 and 2021 tax years, the contribution limits for IRAs (both traditional and Roth) and employer-sponsored retirement plans are listed below. Note the higher limits for those age 50 and older.

2020 contribution limit

2021 contribution limit

Traditional and Roth IRAs

$6,000

$6,000

Traditional and Roth IRAs (age 50 and older)

$7,000

$7,000

401(k) and 403(b) plans

$19,500

$19,500

401(k) and 403(b) plans (age 50 and older)

$26,000

$26,000

Note: You can never contribute more than you've earned for the year.

What are required minimum distributions (RMDs), and how do I schedule my distribution?

Once you reach a certain age (see next question), you're required to withdraw a minimum amount each year from your tax-deferred retirement accounts, including IRAs (with the exception of Roth accounts) and qualified employer-sponsored retirement accounts. (IRAs and defined contribution plans have some differences in required minimum distribution (RMD) timing requirements. For more details, check out the IRS's RMD comparison chart External site.)

Failure to take your RMD by the deadline may result in a hefty IRS penalty.

Once you reach your RMD age, Vanguard will automatically calculate your RMD for you each year for your tax-deferred IRAs and employer-sponsored retirement accounts held at Vanguard. However, you'll need to contact us to actually make the withdrawals.

To make the RMD process simpler, you can schedule automatic RMD withdrawals using our free service. If you don't need your RMD for living expenses, you can keep it working for you by immediately reinvesting it in an existing Vanguard nonretirement account.

At what age do I have to start taking RMDs?

In 2020, the age increased to 72 as a result of new rules under the Setting Every Community Up for Retirement Enhancement (SECURE) Act. You have until the market closes on April 1 the year after you turn 72 to take your first RMD. For each subsequent year, you must take your RMD by December 31. (The SECURE Act simplified the age rule to require first RMD after year of 72nd birthday, regardless of actual birth date)

What if I waived my RMD because of the CARES Act or missed contributing for a prior year?

Note: RMDs for 2020 were waived by the Coronavirus, Aid, Relief, and Economic Security (CARES) Act. But if you missed an RMD for any prior year, the IRS requires that you withdraw your shortfall amount as soon as possible.

If you didn't withdraw enough to satisfy the requirement, you may be subject to a federal penalty equal to 50% of the shortfall. For example, if your RMD is $20,000 and you withdraw $15,000, the $15,000 distribution will be reported on Form 1099-R. You may be subject to a $2,500 penalty, unless the penalty is waived. (See IRS.gov for information about how to request a waiver of the penalty by completing IRS Form 5329.)

I returned my RMD after learning they were temporarily waived because of the CARES Act in 2020. Will I receive a 1099-R?

The Coronavirus Aid, Relief, and Economic Security (CARES) Act provided a temporary waiver of RMDs for 2020 including any delayed 2019 RMD (if the 2019 RMD wasn't taken before January 1, 2020). If you would've had an RMD obligation for 2020, you were not required to take your RMD for 2020 (or delayed 2019 RMD).

If you took a distribution of an amount that would’ve been your RMD in 2020 and then later rolled the distribution over before the IRS deadline, you will receive a Form 1099-R documenting the distribution and a Form 5498 reporting the rollover. Form 5498 is provided to clients and filed with the IRS in May for informational purposes only. Though not required for filing purposes, you should retain this form with your tax records. We encourage you to consult a tax professional if you have questions about how to properly report the distribution and rollover on your tax return.

If I took a coronavirus-related distribution (CRD), will I receive a 1099-R?

In general, you have two options for paying the taxes you owe on the distribution:

  • You can include the CRD in your income in equal amounts over three years, beginning with the year of the distribution; or,
  • You can include the entire distribution in your income in the year of the distribution

Please note that Vanguard will send Form 1099-R for 2020 distributions in early 2021.

You are also required to report CRDs on Form 8915-E, Qualified 2020 Disaster Retirement Plan Distributions and Repayments. (IRS Form 8915-E and instructions on how to complete it are available at irs.gov.) This form allows you to designate your distributions and spread the income over three years. If you repay all or a portion of your CRD, the timing and amount of such repayments may impact how CRDs are reported on your tax return and whether you need to file any amended returns.

If you have any questions, we suggest you consult a tax advisor.

Read more about coronavirus-related distributions & taxes

Why did I receive a 1099-R after taking a qualified charitable distribution (QCD)?

Generally, a QCD is a direct transfer of funds from an IRA owned by an individual over age 70 ½, payable directly to a qualified charity, as described in the QCD provision in the Internal Revenue Code. The maximum annual distribution amount that can qualify for a QCD is $100,000. This limit would apply to the sum of QCDs made to one or more charities in a calendar year. The QCD is excluded from your taxable income.

The QCD will be reported as a normal distribution on your 1099-R for any non-Inherited IRAs. For Inherited IRAs, the QCD will be reported as a death distribution. You should keep an acknowledgement of the donation from the charity for your tax records because you'll also need to report the QCD on your tax return. Information about how to report QCDs on your income tax return is available on the IRS website.

If you have any questions, please consult a qualified tax professional.

I inherited an IRA. What do I need to know about RMDs?

In the year that an IRA owner passes away, the beneficiaries may be required to satisfy any remaining portion of the decedent's RMD before December 31. The date of death of the original IRA owner determines what options you, as the beneficiary, have for satisfying RMDs for subsequent years. See RMD rules for inherited IRAs for more information.

Please note that the CARES Act included a temporary waiver for:

  • 2020 RMDs, including those from traditional IRAs, inherited IRAs, and employer-sponsored plans such as 401(k)s.
  • 2019 RMDs due by April 1, 2020, for individuals who turned 70 1/2 in 2019 and didn't take their RMDs before January 1, 2020.

I rolled over an employer-sponsored plan account into a Vanguard IRA. What tax form will I receive?

The financial institution that held the employer plan will provide you with a 1099-R documenting the amount of the distribution. You will also receive a 5498 from Vanguard confirming that a rollover took place. Form 5498 is provided to clients and filed with the IRS in May for informational purposes only. Though not required for filing purposes, you should retain this form with your tax records.

I transferred an IRA directly from one institution to another. Will I receive a 1099-R reporting the transfer?

IRA asset transfer directly from one IRA custodian to another are not taxable and are not reported on Form 1099-R.

Tax questions for nonretirement accounts

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Did my funds distribute capital gains in 2020?

Finalized year-end dividend and capital gains distributions for Vanguard funds are available by the end of 2020:

The interest income on municipal bonds is generally exempt from federal taxes and from state taxes in the state of issuance. Interest on certain private activity bonds may be subject to the alternative minimum tax (AMT).

Municipal bonds, when purchased at a discount, may subject investors to capital gains taxes when sold or redeemed. Consult a tax professional for additional information.

A certain percentage of dividend income from your stock mutual funds may qualify for a reduced rate. You can use our Qualified Dividend Income calculator to determine your personal QDI.

Note: In March 2021, some Vanguard funds may report "supplemental" income dividends or capital gains distributions for 2020. Because they're taxable for the year in which they're declared, any supplemental distributions made this year are taxable for the 2021 tax year and will be reported on the 2021 tax forms you'll receive next year. If this applies to you, you won't receive updated tax forms this year.

Why are noncovered shares reported on my 1099-B?

If we have cost basis for your noncovered shares, we report it on your 1099-B but we don't report it to the IRS.

Why did I receive a 1099-MISC?

Vanguard may loan out shares of securities held in margin accounts to short sellers. If you own one of these securities in your margin account and the security pays a dividend while it's loaned out, Vanguard will pay you a substitute payment in lieu of the dividend. Substitute payments in lieu of dividends or interest are reported in Box 8 of Form 1099-MISC. Since these substitute payments are taxable at your marginal tax rate instead of the qualified dividend rate, Vanguard will also issue you a reimbursement grossed up to include income taxes you may incur. This reimbursement will be processed later in the year and reported in Box 3 of Form 1099-MISC.

Why does my 1099-DIV show foreign taxes paid on a Vanguard mutual fund?

If your mutual fund has foreign investments and passed your portion of taxes paid to foreign countries, you'll see that value reported. Dividends are grossed up to show the foreign taxes paid. You can take the foreign taxes paid as a deduction or a credit on your taxes. A credit is generally the more beneficial option, but you should check with a qualified tax professional about your individual situation.

Where are Section 199A dividends shown?

  • If applicable, you'll see Section 199A dividends from income paid by real estate investment trusts (REITs) and widely held fixed investment trusts (WHFITs) in Box 5 on your 1099-DIV.
  • Please consult a tax advisor to see if this applies to you. If you don't see any amounts reported in Box 5, the deduction may not be applicable to your holdings at this time. The IRS may issue additional guidance in the near future.

Tax questions for other account types

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Will I get a tax form for my Vanguard Variable Annuity?

You'll receive a 2020 1099-R tax form if you took a withdrawal from your Vanguard Variable Annuity in 2020.

Can I see my tax form for my Vanguard Variable Annuity online?

No. Tax forms for the Vanguard Variable Annuity aren't available online.

When will I receive my 2020 1099-R for my Vanguard Variable Annuity?

All Vanguard Variable Annuity tax forms will be mailed by January 31, 2021.

Will I get a tax form for my Vanguard 529 account?

Form 1099-Q will only be issued if a withdrawal was processed during the calendar year. 529 tax forms are accessible by selecting 'Go to my 529 plan account area' under your 529 account header on the Balances and Holdings page. For information on contributions, select statements from the My Accounts banner above.