Currently in :
Robinhood 1099 Tax
Filing Robinhood 1099 Taxes
When it comes to buying and trading, Robinhood is the perfect platform to meet all of your investment needs. And no, we're not talking about the iconic comic book character. Robinhood is a stock trading and investment app that offers commission-free investing and a trading platform for stocks, exchange-traded funds and cryptocurrencies.
Taxes can be tricky, especially when it comes to stocks and cryptocurrencies. Failing to follow the Internal Revenue Service’s (IRS) instructions could result in a penalty. Robinhood 1099 taxes are no different, and it’s important to understand the ins and outs of Robinhood taxes to avoid any mistakes or penalties. We’ll cover everything you need to know about Robinhood taxes, including details about Robinhood tax forms, so that you can file your taxes optimally and effortlessly.
Table of contents
What is Robinhood?...Read more
Do I need to file Robinhood taxes?...Read more
Does Robinhood report to the IRS?...Read more
Do you have to report stocks on taxes?...Read more
What happens if you don’t file Robinhood taxes?...Read more
Not receiving a Robinhood 1099...Read more
Robinhood tax forms...Read more
Deducting losses...Read more
Correcting errors on your 1099...Read more
What is Robinhood?
First, let’s clear the air on what exactly is the Robinhood app. Although the name sounds like the character from the Batman movies, Robinhood is an app that allows you to buy, sell and trade financial assets.
Robinhood started in 2015 and paved the way for stock trading, as it was one of the first apps to offer stock trading for free without any fees or commissions. The app provided stock market access to the average person along with the option to buy small portions of stocks or other assets. The only taxable investments are individual retirement accounts (IRAs) and tax-deferred accounts.
Back to top
Do I need to file Robinhood taxes?
The short answer is yes. You must report any profits you receive from selling stocks on the Robinhood app or dividends on your individual tax return.
Selling assets leads to capital gains or losses. Capital gains are a profit on a trade and capital losses are incurred when you sell your asset for less than your original purchase price. Selling an asset is considered a taxable event and must be reported to the IRS. But with a loss, you can write that off as a deduction on your tax return.
Short-term and long-term gains impact your tax return because they are taxed differently. A short-term gain is a gain owned for one year or less and is then sold. It doesn’t receive any special tax benefits or rates. The amount you’ll pay depends on your tax bracket and the rates range from 10% to 37%.
Long-term capital gains happen from selling an asset that’s been owned for more than a year. The tax rates depend on your tax bracket and are either 0%, 15% or 20%. Robinhood will send you a consolidated tax report with all of your transactions.
Make sure you keep the wash rule in mind. If you have a stock and sell it at a loss but then buy a similar or identical stock within 30 days, you’ve now done a wash sale and can’t claim this loss as a deduction on your tax return. This is also true if you buy the same exact stock 30 days before you sell it. This is a way to prevent people from intentionally making losses to reduce their tax bills.
Quick tip
Hold your assets for at least a year since long-term gains have a more favorable tax rate compared to short-term gains.
Back to top
Does Robinhood report to the IRS?
Robinhood is required to report every transaction made on the app to the IRS. So if you don’t report your transactions properly, you could face serious penalties. This means any investment you sell for a profit must be reported on your tax return.
Back to top
Do you have to report stocks on taxes?
If you sell any stock using Robinhood, you must report this and pay taxes on the gains. Sometimes Robinhood gives away free stocks for referring a friend or creating an account. If the value of the stock exceeds $600, you’ll need to report this to the IRS.
Back to top
What happens if you don’t file Robinhood taxes?
When it comes to taxes, the IRS doesn't take things lightly. Robinhood reports every transaction to the IRS, so they’ll know everything related to your Robinhood taxes. If you fail to report your Robinhood tax information, the IRS might assume that all of the proceeds from the transactions are gains and tax you on that total amount. This would leave you with a staggering tax bill.
Back to top
Not receiving a Robinhood 1099
If you didn’t receive a 1099 from Robinhood, don’t panic. You might not receive one because you made less than $10 in dividends, or you might have held onto your investments and didn’t sell any during the year. Also, if Robinhood gives you a stock less than $600, you might not receive a 1099, but you’ll still need to report this to the IRS.
Back to top
Robinhood tax forms
Robinhood will provide you with the 1099 forms to file your Robinhood taxes. Remember, though, that the forms may come from different sources depending on the trades made.
In 2020, the IRS reintroduced the 1099-NEC, and this form is used for income payments instead of the 1099-MISC. And if you started trading late in 2023, you might not have received your Robinhood tax forms in 2024. But you should receive your tax forms by mid-February if your capital gains or losses were more than $10. If Robinhood didn’t send you a 1099, you’re still responsible for reporting the capital gains on your tax return.
Back to top
Deducting losses
The IRS allows you to deduct losses from your taxable income when you buy a stock and then sell it for less than the amount you bought it. This will help balance out any capital gains you received and taxes owed. But as with anything, the IRS has rules in place for this.
Rules for deduction losses:
- You have to sell a stock to claim a deduction
- You can use the capital loss to offset your capital gains
- If you don’t have any capital gains, deduct the loss from your taxable income
- The last day for a market loss to count is the last trading day of the year
Back to top
Correcting errors on your 1099
If you find anything inaccurate on your Robinhood 1099, Robinhood will issue you a new 1099 on the app with the corrected information within 1-2 weeks. It’s important to make sure the information on your 1099 is correct and up to date in the app.
If you notice your social security number is incorrect on your Robinhood tax forms, you’ll need to fill out a new IRS W-9 form and send it to the Robinhood support team. You’ll need to wait until you have the corrected forms before you can file your taxes.
If your name is misspelled or you need your name updated (from a legal name change, marriage or divorce), you’ll need to send a request to the Robinhood support team.
Back to top
What’s FlyFin?
FlyFin caters to the tax needs of freelancers, gig workers, independent contractors and sole proprietors.
But anyone can file taxes through FlyFin! FlyFin tracks all your business expenses automatically using A.I. to find every possible tax deduction.
Then, the CPA team files a guaranteed 100% accurate tax return for you – to save you a couple thousand dollars and a ton of time on your taxes.
Download the FlyFin app and have your taxes filed in less than fifteen minutes, saving time and more money on your taxes than last year, guaranteed.
Need help navigating your taxes?
FlyFin's A.I. and 24/7 CPA support will guide you.
Get Started
Was this tip useful?
Yes
No