Because of federal law, Robinhood and other online trading platforms are required to submit your investment activities for the year to the IRS on an annual basis.
When you create a Robinhood account, you must provide your social security number, which the IRS will record to report your earnings or losses.
Remember that Robinhood will not send you paper copies of your tax documents. You may only discover them on the internet. On the other hand, Robinhood will notify you via email when your taxes are completed for you.
It will be your job to report this data on your tax return once you’ve received your Robinhood markets tax forms.

What is Robinhood Taxes
IRS Publication 550, Taxation of Retirement Plans and Other Tax-Favored Accounts, details the requirements further, but Robinhood investments are taxed similarly to other assets. Dividends are still divided into qualified and regular dividends, with qualified dividends taxed at a lower rate. Stocks are taxed in the same manner as before.
You won’t have to pay tax consequences on a stock’s value rising simply because it is invested in, but you will if you make profits when you sell it. Inventory held for less than a year is subject to the short-term capital gains rate, the same as your ordinary taxable income rate. Stocks held for more than a tax year are at 0%, 15%, or 20% long-term capital gains, depending on your income status.
Paying taxes on Robinhood Stocks
If you’ve been investing for an extended period, you’re probably familiar with how and where to disclose your Robinhood earnings. However, if you’re new to funding for the first time, you should know a few things. On Form 1040, interest and dividend income are disclosed on Schedule B. The directors for this form will walk you through the steps needed to complete it and submit your final figures to the IRS.
The Form 1040 Schedule D reports on stocks and cryptocurrencies you sell through Robinhood. Your Schedule D might become quite lengthy depending on the number of transactions you conduct throughout the year. However, if you’re using a tax software provider or a CPA and money manager that allows you to upload any Forms 1099 you get, your life will be much easier at tax time. Robinhood works with Turbo Tax to make it simple to submit your investment income information, but other tax programs should also work.
How much do you get taxed on Robinhood?
The IRS’s position on cryptocurrency is evolving. Because it is a relatively new invention, IRS regulations may change at any moment. However, the IRS considers cryptocurrencies as assets rather than money for the time being. That is, it’s taxed in the same manner as a stock.
When you buy cryptocurrency or move it between online wallets set up in your name, there are no taxes. You must, however, pay income tax on any profits you make when you sell your cryptocurrency. Capital gains taxes are based on the length of time you possess the currency in both short- and long-term rates, as they are with stocks.
Buying cryptocurrency isn’t a taxable event, but receiving it for free stocks, maybe. If you get cryptocurrency as a present, you’ll have to include it as income and pay taxes.
If you trade and settle cryptocurrency, you must also report if the purchase was made with bitcoin or other cryptocurrencies. Let’s assume that you purchased some crypto worth $25 in this example. You’ve kept it for a while, and its value has increased. As a result, you could purchase a $35 item online using your $25 worth of cryptocurrency. The IRS views this as you recognizing a $10 profit in crypto and must charge tax on it.
Unfortunately, this is not always the case. For example, if you spent $25 on a $20 item, you’ve just lost $5. This loss may be used to cancel other income.

How Are Stocks Taxed on Robinhood?
You won’t have to pay taxes just because the stock’s value has risen. You will, however, be required to pay tax on any gains you make when you sell stock. The short-term capital gains tax rate for equities held for less than a year is the same as your normal miscellaneous income tax rate. We’ll also start collecting a 24% backup tax at the beginning of next year. In addition, all cash proceeds, including future sell orders, dividends, interest, and other payments we make to your account, will be subject to a 24% withholding.
When do you file your taxes?
April 15th is the date that small-time investors may submit their taxes. However, if you sell a high-ticket item or derive earnings from day trading, you may be required to submit your taxes quarterly. If you’re required to pay more than $1,000 in taxes, you’ll have to file your returns four times a year instead of once.
It can be a nightmare to figure out what you must pay quarterly taxes. The most straightforward approach is to use a quarterly estimated tax calculator. The following quarterly tax due dates have been estimated:
- April 15th
- June 15th
- September 15th
- January 15th
Don’t assume you don’t have to make quarterly tax payments. If you miss an estimated quarterly tax payment, you’ll be charged penalties and fees.
How to File Robinhood 1099 Taxes
If you’re a Robinhood or Stash trader, you’ll have to submit 1099 forms on your own based on your account activity. Please do not believe that they will hold back your taxes because they cannot. They, however, summarize all of your tax information into a single 1099 form to make things easier for you. This form will include a summary of all your necessary 1099 forms. When you submit your annual return, you must review the information and submit each required 1099 as soon as feasible.
How To Download Your Tax Documents
If you’re having trouble downloading your 1099 from Robinhood, follow these easy instructions:
- Click the account icon in the lower-left corner.
- Go to the Statements & Transaction History page.
- If you send your company paperwork or other documents to the IRS, they will be returned.
Tax Forms Robinhood Will Provide
Robinhood Crypto issues its separate consolidated form 1099-B, much like Robinhood Securities does for its customers. This tax document includes all of the information from your 1099-DIV, 1099-MISC, 1099-INT, and 1099-B.

What Happens if You Don’t File Robinhood Taxes?
We’re required by law to check that all Robinhood customers have certified their professional tax status. We are generally not required to withhold taxes on income for US persons (this can include sales, interest, and dividend payments). However, you may be subjected to backup withholding if you don’t verify your tax status.
Using Robinhood Could Cost You Thousands In Taxes, Here’s Why
Many new do-it-yourself investors are now dealing with complex tax situations for the first time during filing a tax season, which is in full swing. Some individuals are caught up in complex IRS rules, such as the wash-sale rule, and are now responsible for hundreds of thousands of dollars in taxes. Users of innovative platforms, such as Robinhood, are restricted by the lack of essential features that aid in tax preparation. Robinhood’s manual band-aid solutions to address those shortcomings may cost new investors thousands in additional taxes.
Robinhood Doesn’t Allow For Automated Tax-Minimizing Strategy.
Despite its numerous features, Robinhood makes it difficult for investors to employ a tax approach known as “specific-lot identification.” As previously reported by The Wall Street Journal, this method allows investors to lower their tax burden by determining what shares to sell. This is especially important if they sold shares at various times and at varying different prices.
Investors can smooth out returns and potentially offset other gains or losses by selling particular lots. The IRS permits investors to offset gains up to $3,000 of other income with the same stock losses and carry over any remaining capital losses to offset future income. The Wall Street Journal used an example of a trader who held Tesla shares to illustrate the importance of using certain-lot identification in tax filing.
Assume an investor purchased three Tesla example stocks at $400, $650, and $850 in the middle of the past year. If a trader wanted to sell a single share at the current price of around $700, their taxable amount could vary from a significant profit to a deficit depending on which share was sold. If a stock rises in price, the trader may have a $300 capital gain if she sold the share purchased for $400 and a $150 capital loss if she sold the share bought for $850.
Robinhood’s Omission Could Cost You Thousands
Although the costs may differ for investors depending on their trading habits and activity, it is easy to comprehend how they might add up. According to a recent study published in The Financial Analysts Journal, tax-loss harvesting methods boosted after-tax investment returns by 0.82 percent each year.
FAQs
Do I have to pay taxes on Robinhood?
Stock is taxed similarly to this, so it’s subject to the same capital gains taxed as ordinary income. There are no tax implications when you buy crypto or move it from one online wallet to another set up in your name. You will, however, have to pay the income tax bill on your profits if you sell or trade cryptocurrency for a profit.
Will you owe taxes on your investments?
You generally only have to pay taxes on the sale of assets if you achieve a profit. To figure this out, subtract the cost basis of your investment from the selling stocks price to see if you had a profit. If you have a profit on the sale, you’ll need to determine whether or not you owe taxes.
How much do you get taxed on Robinhood?
The short-term capital gains tax rate would be the same as your ordinary income tax bill rate if you held stocks for less than a year. Long-term capital gains rates are more favorable for stocks held for more than a year, ranging from 0 to 20 percent, depending on your income level.
Will you have to pay taxes on your investments?
When you make a profit off of an investment sale, you are generally only required to pay taxes when you receive them again. Subtract your investment’s cost basis from the sale price to determine whether you had a profit. If you have a profit on the sale, you’ll need to determine if you’re due in taxes.
The tax rate on capital gains is usually 0%, 15%, or 20%. Capital gains taxes for assets held for less than a year are taxed at the same rates as ordinary income. What is it? It’s the difference in buying and selling prices on a property or stock that has been appreciated.

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