Tax Filing Forms

Tax forms 1099-B, 1099-DIV, 1099-R, 1099-INT, and 5498

Form 1099-B

What is a 1099-B and will I get one?

The 1099-B reports proceeds from the sale of stocks, bonds, or other securities. Proceeds are simply the amount of money you received in exchange for selling your shares. We sell your shares when you withdraw, when we assess our quarterly fee, when we rebalance your portfolio, we harvest losses with Tax Loss Harvesting+, when you change your allocation, when you adjust your portfolio strategy, when you transfer to another goal at a different risk level, or if we rebalance your Tax-Coordinated ...

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Why are the sales proceeds and/or cost basis so high on my 1099-B?

The sales proceeds figure, as defined in your tax forms, is simply the amount of money you received in exchange for selling your shares this year. The cost basis is the amount of money you paid to purchase the shares that are being sold, with possible adjustments for wash sales and non-dividend distributions. Your sales proceeds and cost basis on your 1099-B may be much higher than your portfolio’s earnings or balance was at any given time, because these proceeds represent the total amount of ...

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Form 1099-DIV

Why are the dividend dates on my Activity page different than the pay dates on my 1099-DIV?

When dividends are paid, it may take two or three days for the reinvestment in your account to complete. Dividend reinvestment trades are displayed on Activity on the date the transaction completes. However, dividends are reported on your tax forms on the date they were paid, which will be several days prior to the date of reinvestment.

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Why did I not receive a 1099-DIV even though I received dividends?

A 1099-DIV form reports dividends a customer received during the year. You will receive a 1099-DIV if your dividends amount to $10 or more over the course of the year. Even if the amount of dividends received is below $10, the 1099-DIV is required if there were any foreign or federal taxes paid. Find your total dividends by logging in and filtering by “Dividends” for the previous calendar year. You can then download a CSV statement to total up dividend activity for that year. Please note that ...

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What is a 1099-DIV and will I get one?

The 1099-DIV reflects dividend payments received and capital gains distributions from stocks you own. You will receive one by Feb. 16, 2021, if you had a Betterment taxable account and: You received more than $10 in dividends in 2020, or You paid any foreign or federal taxes within your account Please note that while Betterment is not required to issue you a 1099 if you earned a relatively small amount of income from your account, taxpayers are still required under IRS rules to report and pay ...

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Form 1099-INT

Why did I not receive a 1099-INT even though I received interest?

A 1099-INT form reports interest received during the year. You will receive a 1099-INT if your interest amounts to $10 or more over the course of the year. If the amount of dividends received is below $10, a 1099-INT is required if there were any federal taxes paid due to backup withholding. Please note that while Betterment is generally not required to issue you a 1099-INT if you earned less than $10 of interest from your account, the IRS requires taxpayers are still required by the IRS to ...

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What is a 1099-INT form and will I get one?

The 1099-INT reflects interest payments received in your Cash Reserve, our high-yield cash account that’s part of our cash management suite. You will receive one by Feb. 1, 2021, if you had Cash Reserve, and in 2020: You received $10 or more in interest, or You paid any federal taxes from your interest due to backup withholding. Please note that while Betterment is generally not required to issue you a 1099-INT if you earned less than $10 of interest from your account, taxpayers are still ...

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Form 1099-R

What is a 1099-R and will I get one?

The 1099-R reports distributions from retirement accounts, like IRAs and 401(k)s. You will receive one from Betterment if you had a Betterment IRA or 401(k) account and in 2020: You requested $10 or more in total distributions from Betterment IRAs or Betterment 401(k)s, or You completed a rollover from a Betterment 401(k) to another retirement plan, or You completed a rollover from a Betterment IRA to an employer sponsored plan like a 401(k) or 403(b), or You completed an indirect rollover (in ...

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Can you correct my 1099-R if my taxable amount in Box 2a on my 1099-R is incorrect?

We cannot make changes to Box 2a of the 1099-R. It is the customer’s responsibility to determine the appropriate taxable portion when filing their tax return by completing the Form 8606. The taxable amount in Box 2a on the 1099-R is frequently incorrect for Traditional IRA and Roth IRA distributions. This can happen at many investment firms. Read below to see why this is the case, and how you can correct it when filing your taxes. The taxable portion of a Traditional or Roth IRA distribution is ...

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Form 5498

How do I report my IRA contributions?

You will receive a Form 5498, which will be downloadable in your account by June 1st, 2021, if you had made annual or rollover contributions into your Betterment IRA. Direct transfers into your IRA will not be reported, per IRS requirements. You do not need to send the 5498 to the IRS—we will report it for you. Note that the 5498 is generated after the tax filing deadline. The reason for this is because it’s up to you to self-report your IRA contributions, and the purpose of the 5498 is just to ...

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Getting started

Where can I find Betterment's Federal tax ID number (FEIN)?

Our Federal tax ID number (FEIN) will be located on your tax forms in the top left-hand corner. You can download your tax forms within your account by Feb. 16, 2021. Betterment is not a tax advisor, nor should any information herein be considered tax advice. Please consult a qualified tax professional.

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How do taxes work for investment accounts?

Taxable Accounts: Individual and Joint With taxable investment accounts, you generally owe taxes each year on the dividends and other distributions paid to you that year. You may also owe taxes when you sell shares, depending on whether or not you’ve realized capital gains on the investment. Taxation of Dividends Most ETFs pay dividends, which are reported on your Form 1099-DIV. These are generally taxable, typically at your ordinary marginal tax rate (0-37%, Federal). For high earners, an ...

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Where do I find my cost basis information or access my realized gains?

Your total cost basis information will be on Form 1099-B, which will be available by Feb. 16, 2021. The 1099-B will list your total cost basis information, broken out between short-term and long-term transactions. Detailed cost basis information for each sale transaction will be available on subsequent pages of the form. Note that although you can run your own cost basis or realized gains reports in your account, these are not official tax forms. Betterment is not a tax advisor, nor should any ...

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What tax forms do I need for a joint account?

The primary account holder, which is the person who originally created the account, will receive the 1099-B and/or 1099-DIV associated with the joint account. Integrations with tax preparation software will only work with the primary account holder's Betterment account. We cannot change the primary account holder on a joint account. Since Betterment is not a tax advisor, we highly recommend consulting with a tax professional for further questions regarding how to file your taxes in a joint ...

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Where is my FATCA box? Is it checked or unchecked?

Betterment tax forms do not include a FATCA box, as we do not allow for foreign investments in Betterment accounts. Any tax forms from Betterment that do not have a FATCA box can be considered “unchecked”. Betterment is not a tax advisor, nor should any information herein be considered tax advice. Please consult a qualified tax professional.

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Income Sources

How can I find my U.S. Government interest income for my tax return?

As reported on your 1099-DIV, your Betterment account may have earned U.S. Government interest income due to bond dividends. This is because your taxable investment accounts may be invested in U.S. Government bonds through bond ETFs, per Betterment’s advice. Generally, the U.S. Government interest portion of a fund dividend income is exempt from state and local income taxes. However, there are some states (NY, CT, and CA) that have an “asset test” which requires 50% of the fund’s assets to be ...

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How can I find my state-specific municipal bond ETF interest for my tax return?

A portion of the dividend income from your municipal bond ETF holdings may be exempt from state income tax, depending on your state’s tax laws. Betterment has calculated this for you, based on your state of residence listed within your account. Simply head to the Documents section of your account and then click the Tax Forms tab to download your Supplemental Tax Statement, which will contain this figure. Please note that while most customers will receive a Supplemental Tax Statement, a small ...

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How can I find my foreign-sourced income for my tax return?

As reported on your 1099-DIV, your Betterment accounts may have earned foreign-sourced income via dividends, resulting in foreign taxes. This is due to the fact that your taxable investment accounts may be invested in foreign stock and bond ETFs, since Betterment’s portfolio is globally diversified. When filing your tax return, you may be required to report foreign-sourced income, which means you’ll need to report the total of all the foreign-sourced dividend income that you earned. Betterment ...

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Required Minimum Distributions

Where can I find my required minimum distribution (RMD)?

You generally have to start taking required minimum distributions (RMDs) from your Traditional IRA account after you reach a certain age. Roth IRA accounts do not require withdrawals while you own them. You can find your RMD amount, if applicable, on your FMV or Form 5498 by clicking here. Betterment is not a tax advisor, nor should any information herein be considered tax advice. Please consult a qualified tax professional.

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Tax Features

How does Tax Impact Preview work?

Selling shares is a taxable event—those sales could be triggered by a withdrawal or an allocation change. Tax Impact Preview shows the estimated gains and losses the sale is expected to realize, as well as an estimate of the taxes that may result, in real-time, before the transaction is carried out. When initiating a withdrawal amount on the Transfer tab or adjusting the allocation slider on the Advice tab, the estimated tax impact will appear, giving you access to a summary of the short- and ...

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Where will my tax loss harvests be represented?

Tax Loss harvesting+ is the practice of selling a security that has experienced a loss. By realizing, or "harvesting" a loss, investors are able to offset taxes on both gains and income. The sold security is replaced by a similar one, which helps maintain an optimal asset allocation and expected returns. While Betterment tracks your TLH+ losses within your account and displays them to those who have enabled the feature, the IRS requires Betterment to report total gain and loss figures from all ...

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