I’m done with my taxes. I mailed the returns last week. With taxable investments and selling stocks from vested RSUs and ESPP purchases, it can get complicated. Any help from the mutual fund companies and brokerage firms would be welcome.
In this post I will review the 1099 packages I received from different companies — Vanguard, Fidelity, Wells Fargo Advisors, and E*Trade — for their timeliness, level of details, and helpfulness for preparing taxes.
Vanguard (the mutual funds side) wins in timeliness. I received the 1099 forms from Vanguard in early January. But Vanguard also comes in last in the level of details.
The 1099-INT and 1099-DIV forms from Vanguard just have the total numbers for each fund. There are no accompanying details that show how the total numbers are calculated. This makes it difficult to double-check the numbers to make sure they are accurate.
Because each fund is a separate legal entity with its own separate tax ID, I believe you have to enter the numbers separately rather than just entering the total across all funds. Downloading directly into tax software may help; I didn’t try.
Fidelity’s 1099 forms came in mid-January. Fidelity formatted the forms very clearly and most efficiently among the four companies I dealt with this year.
In addition to the total numbers, Fidelity also provided back-up details. If the 1099-INT form shows total interest earned as $356.72, the details part shows the date, the source, and the amount of all the interest payments that add up to $356.72.
You can see the level of details Fidelity provides from this illustrative guide.
Wells Fargo Advisors
Wells Fargo Advisors sent the 1099 package toward the end of January. Like Fidelity, Wells Fargo Advisors provided both summary and details.
The total dividends are broken down by investments, but not by date. For example Wells Fargo shows investment X paid dividends 4 times in the year for a total of $207.32 but it doesn’t list the 4 payments individually by date.
The investment sales are broken down into short-term and long-term, and by lots. If a sale involved multiple lots, Wells Fargo showed the date acquired, cost basis, and gain/loss for each lot.
You can see how Wells Fargo does it in the 1099 package from this PDF guide.
I use E*Trade only because my employer uses E*Trade for RSUs and ESPP. I don’t have many transactions there yet E*Trade was the last one to provide 1099s. I had to wait until late February.
E*Trade’s 1099 package isn’t as impressive as Fidelity’s or Wells Fargo’s. For the tiny bit of interest in the cash account, it did give a breakdown by payment dates. However, E*Trade didn’t provide any supplemental information for investment sales.
Overall, in terms of timeliness, level of details, and helpfulness of the 1099 tax form packages, I would rank Fidelity first, Wells Fargo a close second, Vanguard and E*Trade last.
Although I love Vanguard for its funds, Vanguard’s customer-facing operations side continues to lag the competition. Vanguard does what it’s legally required to do in providing the 1099 forms but it’s not doing anything extra beyond that.
If you have an account at Schwab or TD Ameritrade, please comment on how much details Schwab and TD Ameritrade provide in their 1099 tax form packages.
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I think that Schwab was my favorite of the bunch. Their 1099 was incredibly detailed – it was 12 pages for me and they had a table of contents!
First, they described the short-term transactions, then the long-term. Next, they had a table for the realized gains. There were also several pages with information.
I agree that the Vanguard ones were confusing.
I am having issues with Fidelity. I go to their website and there are no tax forms for me to download. I presume that there is not enough taxable activity to generate tax forms. However, when I go to Fidelity via the Turbo Tax import, it manages to download a form resulting in less than $2.00 in taxes. Furthermore, Turbo Tax finds validation errors in the downloaded form during the Turbo Tax validation process.
Harry Sit says
schmoe – That’s why I don’t download tax forms into tax software. I don’t know what get into the software. Fixing the errors can take more time than manual entry.
I download to TurboTax (TT). I judge quality by how thoroughly the 1099 from in TT is filled in. The main issue is with the 1099-B forms; actually it’s the data for the new 8949 form related to Schedule D.
Vanguard (mutual funds) is the worst for 8949, since it does not enter cost basis for noncovered shares. Their reason is that they don’t know what basis method I’m using. I’d rather have them assume average basis and download that than download nothing. I’m fine with the 1099-DIV.
Wells Fargo and Fidelity both are very good. I think I had to manually check a few of the boxes related to covered/noncovered shares.
Vanguard Brokerage Services actually filled in the 1099-B (8949) forms most thoroughly of the three mentioned so far. I think I still may have had to check one box manually; can’t remember for sure.
Interactive Brokers (which I no longer use, but was using for part of 2011) also was excellent. It took them the longest to get their TT download for form 8949 working, and you have to download to a file then import to TT, but the forms were filled out very thoroughly (again, may have had to check one box manually).
Since I download, a separate 1099-DIV is generated by TT for each Vanguard fund. For others who’s returns I help with and who enter manually, we just enter the total for all funds. I have seen a return prepared by a professional who does it this way. I doubt the IRS is going to care as long as you pay the correct amount of taxes. This is based on dealing with several IRS correction notices.
Vanguard provided 1099’s early, accurately, and with all the necessary detail. Last year, Fidelity provided inaccurate 1099’s, and then changed them six more times, inaccurately — resulting in six amended returns for anyone who believed their gibberish. This year, we are still waiting for their overdue 1099’s. In my experience, it takes much longer to prepare a return using Turbo-tax than to prepare one manually, and Turbo-tax is ridden with inaccuracies that must be “overridden” — assuming you have already prepared the return manually, so you can spot the inaccuracies.
Fred Bateman says
In the first half of 2020 a broker where I had an account announced they were shutting down. I did not like where they were going to transfer my account, so I and two friends who also had accounts there transferred our accounts to Fidelity. Each of our 1099’s arrived with no detail whatsoever. I called nearly a month ago and was told that it will be mailed. Neither I or my friends have ever received the detail. Now I see it has been appended onto the 1099. I have resisited printing it out since they said that it was being mailed. I am wondering if this is their practice for accounts that are transferred.
As far as Fidelity’s reporting it would be helpful to differentiate between Fidelity mutual funds only vs Fidelity Brokerage accounts. The brokerage accounts have many more reporting issues.
A question was asked about Ameritrade’s 1099 package. It was on time and provided all necessary detail (ie a full recap of all transactions). I may move my Fidelity account there.