Millions of people use Robinhood to trade stocks and cryptocurrencies because they can do it without incurring trading fees. If you’re one of them, you’ll need to get the 1099 form from the broker to file your tax returns. When does Robinhood release tax documents to customers?
The 1099 form is an IRS tax document used to report income from sources other than employment. These include income from trading stocks or cryptocurrencies and dividends paid to company shareholders. Brokers send 1099 forms to their customers detailing earnings, losses, and tax withholdings from trades made throughout the year. People who receive the form use it to prepare their tax returns.
When does Robinhood release 1099 tax documents to customers?
The IRS sets the deadline for brokers to distribute the 1099 tax form to their clients. Individual brokers might have their own timing, but it’s usually within the IRS deadline. If there's a delay in the broker sending out the forms, it can request a deadline extension.
Robinhood writes on its website that customers should have their 1099 forms ready by mid-February, which usually aligns with the IRS deadline. However, Robinhood users were hit by tax form delays in 2021, which resulted in many complaints on social media. The broker blamed the problem on special processing requirements and an issue with a vendor. The IRS granted it a 30-day extension to get the forms sent to customers.
Although the broker explained that the delay was caused by unavoidable challenges, some traders threatened to leave Robinhood for delaying their tax documents. When Robinhood sends out the 1099 form, it's important to customers for several reasons.
Some people have complex tax situations and might miss the IRS's return filing deadline if they don’t get the documents they need in time, which could lead to expensive penalties. Other people might need to complete the filing early to possibly get their tax refunds quicker. Many people look forward to the refund. Some people invest the money in the next crypto to explode, while other people might put the money in a retirement savings account or use it to pay down their student loan debt.
How to access Robinhood tax documents.
You can download your 1099 form from the Robinhood app or website. You can find it under "Statements." If you’re on the app, tap the account icon, tap "Statements and History," and then tap "Tax Documents." You might see multiple 1099 forms, which usually means that you traded stocks and cryptocurrencies.
You can use Robinhood to trade stocks and cryptocurrencies but the broker treats those transactions differently for tax purposes. As a result, it will issue separate tax forms for stock and crypto trades, which might result in you having multiple 1099 forms.
Another reason you might see multiple tax forms is if Robinhood detected that an earlier form had errors and it issued a corrected one. Robinhood will let you know if a form had an error. Also, you might need to file an amended return with the IRS.