mountainsoft
Thinks s/he gets paid by the post
I am familiar with standard savings accounts. First with my local bank, then I switched to a Discover online savings account earlier this year. The interest rate is fairly low (1.8% at the moment), but it's FDIC insured and I can add or withdraw money any time. Come tax time the bank sends me a 1099-INT so I can plug the numbers into my tax return. Easy Peasy.
I started looking at taxable investment accounts through Vanguard today and have to confess I'm confused. I choose investments, make contributions, and understand losses can occur (not FDIC insured). I assume I can take money out any time I want. However, I don't understand the tax side of things. What are dividends and capital gains, and how do they factor in come tax time? Do they send an equivalent 1099-INT statement, or would I have to track and fill out additional tax forms on my tax return?
New stuff is always scary...
I started looking at taxable investment accounts through Vanguard today and have to confess I'm confused. I choose investments, make contributions, and understand losses can occur (not FDIC insured). I assume I can take money out any time I want. However, I don't understand the tax side of things. What are dividends and capital gains, and how do they factor in come tax time? Do they send an equivalent 1099-INT statement, or would I have to track and fill out additional tax forms on my tax return?
New stuff is always scary...