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Schwab Tax Form Question
Old 02-14-2024, 02:12 PM   #1
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Schwab Tax Form Question

I'm starting to file my 2023 taxes. Last year, I moved my money from Vanguard to Schwab, so the Schwab tax forms are new to me.

On my 1099 Composite form that was prepared for me by Schwab, in the Summary pages that are not sent to the IRS, I see the details of Dividends and Distributions. There is a column for "Paid in 2023" and a column for "Paid/Adjusted in 2024 for 2023". What is that latter column supposed to be telling me? I see very weird numbers that I can't relate to anything that actually happened. More than half of my investments that paid a dividend show a value in that latter column. Some of them are even negative numbers.

For example, VTI (Vanguard Total Stock Market ETF) shows $0 in dividends "Paid in 2023" and $17,919.82 in dividends "Paid/Adjusted in 2024 for 2023". Distributions for VTI were made in March, June, Sept and Dec 2023. The December one shows as transacting on 12/27 and processed on 12/27 in my December statement. So I don't think even that one fell into 2024 in any way.

Can a Schwab customer help me figure out what this column is telling me? It doesn't really seem to influence the 1099-DIV. Those numbers seem correct.

Edited to add: I just noticed there are 2 entries for VTI. One in the Non-Qualified Dividends section and one in the Qualified Dividends section. The above VTI numbers are in the Qualified Dividends section. In the Non-Qualified Dividends section, VTI shows $18,926.70 "Paid in 2023" and ($17,919.82) "Paid/Adjusted in 2024" for 2023). So now I'm even more confused.
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Old 02-14-2024, 02:44 PM   #2
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Originally Posted by PaunchyPirate View Post
On my 1099 Composite form that was prepared for me by Schwab, in the Summary pages that are not sent to the IRS, I see the details of Dividends and Distributions. There is a column for "Paid in 2023" and a column for "Paid/Adjusted in 2024 for 2023". What is that latter column supposed to be telling me? I see very weird numbers that I can't relate to anything that actually happened. More than half of my investments that paid a dividend show a value in that latter column. Some of them are even negative numbers.
That is in the summary information section, not provided to the IRS, so you don't have to worry about it. Only the 1099 forms are used in preparing your return.
The last column on the right should govern.
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Old 02-14-2024, 03:04 PM   #3
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That is in the summary information section, not provided to the IRS, so you don't have to worry about it. Only the 1099 forms are used in preparing your return.
The last column on the right should govern.
I understand that. However, I would like to know what this data means. They obviously put it there for me to know something.
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Old 02-14-2024, 03:50 PM   #4
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I understand that. However, I would like to know what this data means. They obviously put it there for me to know something.
You will need to call them. There is no reference wording on the form to tell you what it means.
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Old 02-14-2024, 04:12 PM   #5
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It means that after December 31, the fund managers were able to determine that some of the dividends were or were not qualified or that some of their internal stock sales were wash sales. They may also have realized that some of the cap gains were actually long instead of short or vice versa. It is impossible for them to know some of this stuff until January 30 of the following year, so it's very normal to make these adjustments in early February. They should all be incorporated into the 1099-DIV you received.

For example, VTI paid you $18,926.70 in dividends during the year. Schwab tracked all of that income as non-qualified dividends because they just get a lump sum from Vanguard four times a year and Vanguard doesn't tell them how to categorize the divs until later. In early Feb, VTI reported to Schwab that actually $17,919.82 were qualified dividends, so Schwab moved that money from the non-qualified column to the qualified column. This is good for you, because qualified dividends are taxed at lower rates than non-qualified dividends.

When you were with Vanguard, they either didn't track things this way or didn't expose their internal bookkeeping as much as Schwab does.
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Old 02-14-2024, 04:22 PM   #6
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It means that after December 31, the fund managers were able to determine that some of the dividends were or were not qualified or that some of their internal stock sales were wash sales. They may also have realized that some of the cap gains were actually long instead of short or vice versa. It is impossible for them to know some of this stuff until January 30 of the following year, so it's very normal to make these adjustments in early Feberuary. They should all be incorporated into the 1099-DIV you received.

For example, VTI paid you $18,926.70 in dividends during the year. Schwab tracked all of that income as non-qualified dividends because they just get a lump sum from Vanguard four times a year and Vanguard doesn't tell them how to categorize the divs until later. In early Feb, VTI reported to Schwab that actually $17,919.82 were qualified dividends, so Schwab moved that money from the non-qualified column to the qualified column. This is good for you, because qualified dividends are taxed at lower rates than non-qualified dividends.

When you were with Vanguard, they either didn't track things this way or didn't expose their internal bookkeeping as much as Schwab does.
Cathy63, thank you for the excellent explanation. That makes perfect sense. And no, Vanguard never provided that detail for my accounts. Thanks again.
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