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Vanguard Tax Forms if you've converted to brokerage
Old 02-23-2016, 07:52 AM   #1
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Vanguard Tax Forms if you've converted to brokerage

I'm probably not the only one who let Vanguard convert/move their mutual fund account to their brokerage account, so this is a heads up that Vanguard has separate tax forms for each account.

I pulled out the tax forms I have Vanguard mail me and started my taxes yesterday. I noticed that the numbers after importing my Vanguard tax statements were a lot higher than what I received in the mail. For the old mutual fund account I had earlier in the year, they mailed me a 1099-DIV, 1099-B, and Foreign Tax Paid. For the brokerage account, they haven't (yet) mailed me anything, but I see via the import and also looking at my account online, that they did a 1099 Consolidated statement that includes everything since the conversion, including year end distributions.

If I had chosen to enter the numbers manually from the mailed statements, I might have missed this. Perhaps the other statement is still to be mailed, or perhaps I misfiled it. I only got a start on taxes and haven't gone searching for everything tax related yet, such as donation receipts.

Just a heads up for others who did the brokerage conversion at Vanguard this year, especially if you don't import tax statements directly from Vanguard.
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Old 02-23-2016, 04:49 PM   #2
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Right. One should always reconcile the tax forms payers send with the Dec 31 statement to make sure everything is in. Doesn't take long. I don't import because it simply doesn't take long to enter the data manually and it forces me to look at the forms (I don't use interview mode on tax software).
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Old 02-24-2016, 07:12 AM   #3
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jebmke gives great advice:

Reconcile your 1099s with what you know happened in your accounts. This can also catch mistakes on 1099s that show up all too often.

But note that if you had an international fund that paid foreign taxes, then the totals on a 1099-DIV will be higher than what is shown in your account records by the amount of the foreign taxes paid. A few of my brokerage companies now have separate pages describing this. They must've gotten too many calls from clients about the difference.

Another thing is that the amount for Qualified Dividend Income may need to be adjusted downward by you if you did not meet the personal holding period to keep those dividends qualified.

A number of people complained at bogleheads.org a year ago about the two sets of Vanguard 1099s. And the same thing is happening this tax season.
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Old 02-24-2016, 11:30 AM   #4
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So what happens if the numbers are wrong, do they send you new form if you call them. I know the IRS software works straight from the reported numbers but what if you disagree with the numbers?


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Old 02-24-2016, 12:05 PM   #5
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If the numbers are wrong and saying you will pay more tax, then you can call them. That's a tough one, since I don't have ready examples of that. OTOH, you have to trust them that they will report the proper amount of qualified dividends and foreign taxes that were paid because you really have no records of that unless the error is egregious: You look up on the web site of an ETF sponsor and see completely different numbers for the ETFs you own than what your broker reported to you.

But if they say you will pay less than tax you should, then you can just pay more tax.

For instance, there is no way for a broker to know you created a wash sale with a sale they reported on your 1099-B but that you rebought in your spouse's IRA. You have to make the adjustment yourself for the disallowed loss on your tax return. I don't see how the broker could be expected to change anything.

Or if the shares you bought in early December paid a qualified dividend in mid-December, but you sold them in early January. You would not have held the shares for 61 days and thus not met the personal holding period. I can imagine some brokers might change this, but it is really your responsibility to just change what you report on your tax return.
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Old 02-24-2016, 04:02 PM   #6
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I never checked the foreign tax paid on my Vanguard account. But recently I had similar problem with Scottrade, they report I had a big gain, I don't recall I did, so I'm still waiting for them to send me the tax form. They also seemed to miss reporting 2014, one trade was not reported the more I looked. But I wonder if I come out with different numbers from them, would they re-issue new 1099. I have to do more investigation.


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Old 02-25-2016, 10:45 AM   #7
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I did get my tax forms from the brokerage in the mail today.
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Old 02-26-2016, 06:10 PM   #8
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I got the tax statements for the new Vanguard account they converted my old account to and sure enough the numbers don't match. Grrr. These are lower than the numbers reported on the statements I got for the original account. I already entered the higher numbers from the old account forms which I would think are correct but if they're reporting the numbers from the new account to the IRS then I think this is going to turn into a mess.

Then there's the issue of the PAYER's Federal ID No and the Recipient Account No that are also different. Which ones do I use?
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Old 02-26-2016, 06:26 PM   #9
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Upon further looking at the forms, it appears that I have to report info from both old and new accounts because the old account's info doesn't include the transactions that took place since the account was converted.
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Old 02-26-2016, 07:13 PM   #10
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Are y'all saying that Vanguard did not make it exceptionally clear that folks who "updated" would get two sets of 1099s, one for before and one for after, that folks would have to wait for and use BOTH on their tax return?

Was there no clue or hint from Vanguard at any point in time about this?
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Old 02-26-2016, 08:02 PM   #11
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The same thing happened when vanguard brought the brokerage operation in house, you got 1 1099 set from Pershing who were the old brokerage operators, and 1 from vanguard. You entered both into the tax program. and the results appeared on different lines on schedule b.
One test is to go to the page where vanguard tells you your yearly results, (not the tax page but the page that looks at dividends and capital gains and see if the totals match the combination.
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Old 02-27-2016, 06:50 AM   #12
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Quote:
Originally Posted by LOL! View Post
Are y'all saying that Vanguard did not make it exceptionally clear that folks who "updated" would get two sets of 1099s, one for before and one for after, that folks would have to wait for and use BOTH on their tax return?

Was there no clue or hint from Vanguard at any point in time about this?
Nothing in the email I got requesting I switch, and nothing in the page they pointed me to: https://investor.vanguard.com/info/account-upgrade


Perhaps there was some notice when I actually went through the process.


If you happened to go through their tax center page and click on https://personal.vanguard.com/us/insights/article/help-tax-questions-122015 (I didn't think I had questions so I didn't do this), you see this partway down:


Quote:
If you upgraded to a Vanguard Brokerage Account in 2015, you may receive two tax forms: one in late-January that will cover the period before your upgrade and one in late-February that will cover the period after it.
So, there was somewhere between a clue/hint and "exceptionally clear".
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Old 02-27-2016, 07:07 AM   #13
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Quote:
Originally Posted by LOL! View Post
Are y'all saying that Vanguard did not make it exceptionally clear that folks who "updated" would get two sets of 1099s, one for before and one for after, that folks would have to wait for and use BOTH on their tax return?

Was there no clue or hint from Vanguard at any point in time about this?
Well, all other things being equal, that certainly would be in conflict with Vanguard's immediate goal of getting as many accounts converted over to brokerage accounts now wouldn't it....
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Old 02-27-2016, 07:28 AM   #14
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Just so I'm clear, I started this thread as a "Be Aware" rather than a complaint.


They certainly could've done better; my suggestion would've been to keep a list of those who have converted and send a directed end of year notice via email, snail mail, or whatever method we've selected for notifications.
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Old 02-27-2016, 09:41 AM   #15
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I have another set of tax forms from Vanguard. I haven't opened it yet. More confusion.


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Old 02-29-2016, 04:38 PM   #16
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Another gotcha with the brokerage conversion. I'm doing a partial Roth recharacterization of a conversion. Just got a call from my Flagship rep that I need to use the form for the brokerage, not the one that I used that's apparently for the other type of account. I don't recall how I found it but it never occurred to me that there would be a different form. Out of curiosity, I did a search to see if there was anything to give me a clue, and search is down. <smh>


Also, this pdf form wouldn't let me type in the last 4 of my SSN, nor did it give me enough spaces for one of the fund ticker symbols, and it didn't accept today's date, 2/29/2016. Little things, but pretty shoddy work on their part.
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Old 02-29-2016, 05:03 PM   #17
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WARNING!

At least two posters over at bogleheads.org have reported that they have received CORRECTED 1099s from Vanguard. This means that if you are contemplating using your uncorrected 1099s to fill out your tax return, you may wish to wait a little bit before doing so.
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Old 02-29-2016, 05:26 PM   #18
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Thanks for the headsup, I was just about to file. What a cluster! Doesn't IRS have deadlines for this stuff?
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Old 02-29-2016, 05:47 PM   #19
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Thanks for the headsup, I was just about to file. What a cluster! Doesn't IRS have deadlines for this stuff?
I vaguely remember that someone wants to have a new law that says if the 1099 is not changed by more than $100, then no amended return is needed. But maybe I am spreading a rumor or wishful thinking?
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Old 03-01-2016, 07:53 PM   #20
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I'd be for that

I logged into Vanguard today but don't see any supplemental forms for me so I'm going ahead with filing my return this evening. I want my refund so...er...I can feel good about it sitting in my account than their's? lol
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