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Help for your most common tax questions

February 13, 2017

Here are answers to some questions we've received from clients recently, along with links to additional information and helpful resources.

When will I get my Vanguard tax forms?

Tax forms for mutual fund accounts have mailed and are available online. You can expect to get your brokerage account tax forms starting in late February. Please visit our Tax-filing information page to learn when specific tax forms will be ready.

If you've added tax forms to your Vanguard e-service package, you won't receive paper copies. Instead, we'll send you an email as soon as the forms are available online in your secure Tax center.

If you still receive paper copies of your tax forms by mail, you should get them shortly after they're posted online.

Notes about Form 1099-DIV

  • You won't receive Form 1099-DIV if your dividend or capital gains distributions amounted to less than $10 for the year. This situation is particularly likely for money market funds because low interest rates have led to lower yields.
  • If you own the REIT Index Fund, you'll receive both a 1099-DIV and 1099-B tax form for this fund in February 2017.

Did you upgrade to a Vanguard Brokerage Account last year?
If so, you'll receive two sets of 2016 tax forms: one set in January (for your mutual fund accounts), and another in February (for your brokerage account). You may need both to report your state and local tax liability.

Can I still make an IRA contribution for 2016?

Yes, provided you meet the eligibility requirements and you're still under the annual contribution limit. The last day to open a new IRA or contribute to an existing IRA for the 2016 tax year is Tuesday, April 18, 2017.

When making your contribution, please indicate whether it's for the 2016 or 2017 tax year.

Compare IRA types and their tax benefits »

Investing online?

Investing by mail?

Regular U.S. mailRegistered, certified, or overnight mail
Vanguard
P.O. Box 1110
Valley Forge, PA 19482-1110
Vanguard
455 Devon Park Drive
Wayne, PA 19087-1815

How much can I contribute to my retirement account?

For the 2016 tax year, the contribution limits for IRAs (both traditional and Roth) and employer-sponsored retirement plans are below. Note the higher limits for those aged 50 and older.

 2016 contribution limit
Traditional and Roth IRAs $5,500
Traditional and Roth IRAs (age 50 and older) $6,500
401(k) and 403(b) plans $18,000
401(k) and 403(b) plans (age 50 and older) $24,000

Why am I receiving two 1099 tax forms?

If you upgraded to a Vanguard Brokerage Account in 2016, you'll receive two sets of 2016 tax forms: one set in January (for your mutual fund accounts), and another set in February (for your brokerage account). You may need both to report your state and local tax liability.

With a few exceptions, you'll likely receive one 1099 Consolidated Form for all of your mutual fund and brokerage holdings beginning next year.

Did my funds distribute capital gains in 2016?

Finalized year-end dividend and capital gains distributions for Vanguard funds are now available:

The interest income on municipal bonds is generally exempt from federal taxes and from state taxes in the state of issuance. Interest on certain private activity bonds may be subject to the Alternative Minimum Tax (AMT).

Municipal bonds, when purchased at a discount, may subject investors to capital gains taxes when sold or redeemed. Consult a tax professional for additional information.

A certain percentage of dividend income from your stock mutual funds may qualify for a reduced rate. You can use our Qualified Dividend Income calculator to determine your personal QDI.

Note: In March 2017, some Vanguard funds may report "supplemental" income dividends or capital gains distributions for 2016. Because they're taxable for the year in which they're declared, any supplemental distributions made this year are taxable for the 2017 tax year and will be reported on the 2017 tax forms you'll receive next year. If this applies to you, you won't receive updated tax forms this year.

What is cost basis and why do I need to know about it?

Generally speaking, cost basis is the price you originally paid for an investment. It also includes adjustments such as reinvested dividends and capital gains, along with any sales commissions or transaction fees. If you sell shares from a nonretirement (taxable) mutual fund account or brokerage account, you must report the cost basis of those shares to the IRS.

See our cost basis information section for more information, including which cost basis methods we offer.

What are RMDs, and how do I schedule my distributions?

Generally, if you're age 70½ or older, you're required to withdraw a minimum amount each year from your tax-deferred retirement accounts, including IRAs (with the exception of Roth accounts) and qualified employer-sponsored retirement accounts. (IRAs and defined contribution plans have some differences in RMD timing requirements. For more details, check out the IRS's RMD comparison chart.)

Failure to take your required minimum distribution (RMD) by the deadline—generally, before market close on December 31 or by April 1 of the year following the one in which you reach age 70½—may result in a hefty IRS penalty.

Once you reach age 70½, Vanguard will automatically calculate your RMD for you each year for your tax-deferred IRAs and employer-sponsored retirement accounts held at Vanguard. However, you'll need to contact us to actually make the withdrawals.

To make the RMD process simpler, you can schedule automatic RMD withdrawals using our free service. If you don't need your RMD for living expenses, you can keep it working for you by immediately reinvesting it in an existing Vanguard nonretirement account.

Sign up for Vanguard's free RMD service | Learn more about RMDs

What should I do if I've forgotten my vanguard.com user name and password?

If you've forgotten your password, your user name, or both, you can go to our logon page and select Set up your user name and password. Once you verify your identity, you can create a new user name and password. You can then access your account using the updated user name and password.

Visit our Security center »

Notes:

  • All investing is subject to risk, including the possible loss of the money you invest.
  • When taking withdrawals from an employer-sponsored plan or traditional IRA before age 59½, you may owe ordinary income tax plus a 10% federal penalty tax.
  • Please consult an independent tax or financial advisor for specific advice about your individual situation.
  • Vanguard Brokerage Services is a division of Vanguard Marketing Corporation, member FINRA.
  • Links to third-party websites will open new browser windows. Except where noted, Vanguard accepts no responsibility for content on external sites.
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