How Do You Pay Taxes on Robinhood Stocks?

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Contributor, Benzinga
September 14, 2021

The explosion of robo-advisors and investment management apps have brought stock market and cryptocurrency investing to the mainstream. Investments can build your wealth now and in the future, but they do add another layer of confusion to an already burdensome chore: filing yearly taxes.

Robinhood’s platform makes it easy to report your taxable events like selling stocks or receiving dividends. Use our guide to learn how to pay taxes on Robinhood stocks and understand the details.

How Are Stocks Taxed on Robinhood?

Whether you’re an experienced investor or newer to the game, your end goal is likely the same: to see profit as a return on your investment. This profit, such as capital gains or receiving dividends, can be considered income and may be a taxable event. This means using Robinhood comes with filing taxes on your investments.

How stocks are taxed depends on the tax guidelines set by the IRS, which are outlined in Publication 550 detailing the tax obligations for investment income and expenses.

When WON’T you pay taxes? Well, you only owe taxes on investments that you sell, not investments that happen to increase in value over the course of time. And while both long-term (stocks owned for more than 12 months) and short-term (stocks owned less than 12 months) capital gains are considered income, they’re taxed at different rates. 

Any short-term gains you see will be taxed at the same rate as your regular income. Long-term capital gains have rates falling at 0%, 15% and 20%, and the rate being dependent on your income. 

If you receive dividends from any of your investments, they’re taxable as income. The rate they’re taxed at will depend on if the dividend is a qualified dividend or ordinary dividend. Qualified dividends are taxed at a lower rate than ordinary dividends. Luckily, most U.S. stocks rank as qualified dividends. 

Robinhood Tax Documents

As a Robinhood client, your tax documents are summarized in a consolidated Form 1099. Any information found on Forms 1099-DIV, 1099-MISC, 1099-INT and 1099-B. You’ll receive your Form 1099 tax documents no later than February 16, 2021. 

You can find your Form 1099 in your mobile app under your Account icon. From there you tap Statements & History → Tax Documents. If you aren’t eligible to get any tax documents from Robinhood, it will make sure to let you know so you aren’t waiting around for them. 

Another note: you’ll want to update your Robinhood app to the latest version to ensure you get all the proper documentation. Robinhood strives to deliver its clients a seamless portal to your tax information, and keeping the app updated will smooth out any rough spots. If you’re having any issues, Robinhood suggests uninstalling and reinstalling the Robinhood app and turning your phone off and back on.

Depending on your unique circumstances, you may receive more than 1 Form 1099. This applies to Robinhood clients who were accountholders with Apex Clearing Corp, the clearing firm Robinhood formerly worked with. You may receive 1 or more of the following forms:

  • Apex IRS Form 1099:
    • For filers who have taxable events in 2020 at Robinhood’s former clearing partner Apex Clearing Corp.
  • Robinhood Securities IRS Form 1099:
    • For filers who had taxable events in 2020
    • Form 1099 will come from Robinhood Securities, LLC, the new clearing platform
  • Robinhood Crypto IRS Form 1099:
    • For filers who sold cryptocurrencies in 2020
    • You’ll get both a PDF and CSV version of your Form 1099 from Robinhood Crypto, LLC

Paying Taxes on Robinhood Stocks

If your dividends are over $10 or you sell a stock or bitcoin within a filing year as a Robinhood client, you’ll have to file taxes on this income. When you receive your consolidated Form 1099 (or Robinhood notifies you that you aren’t due any tax documentation), you’ll have all the information you need to properly file taxes on your Robinhood stocks and cryptocurrency. 

It will send the same form to the IRS. 

Only investments you’ve sold are taxable, so you won’t pay taxes on investments you held throughout the year. If you had a bad year and your losses outstrip your gains, you can deduct up to $3,000 from your taxable income as long as you sell any duds by the end of the year. This tax strategy is known as tax-loss harvesting, and it can help make up for any losses you saw. 

Crypto Taxes on Robinhood

The same laws that govern property transactions are broadly applied to buying and selling crypto. For example, you must include any gains or losses in profit from selling any virtual currency in your tax returns.

If you’re using a tax preparer like TurboTax, it may have a separate area to enter cryptocurrency income. For example, TurboTax allows you to import the Robinhood Crypto 1099 CSV you receive directly into its software.

You can find more resources regarding the federal cryptocurrency guidelines on, including this FAQ section addressing virtual currency transactions. 

Best Tax Preparers

There is a wide range of solid digital tax preparers, but Intuit TurboTax is the only software you can integrate with your Robinhood account. You can funnel your Robinhood trade history, including your cryptocurrency investment income, right into the TurboTax software when you file your taxes.

Best For
  • Beginners
securely through Robinhood's website

More Useful Robinhood Tax Information

Be prepared to not file your taxes until mid-February. It's best to file all your information at once so you don’t have to start over and refile your tax reports. 

Once your documents become available, you can access them under Statements & History → Tax Documents in the Robinhood mobile app. You can also download them via the Robinhood web platform. This process may also be best for large documents.

If you receive an amended Form 1099 and need to refile or correct incorrect information on your Form 1099, Robinhood can help you out. Check out its section on Tax Form Corrections to see if any of the outlined scenarios match yours.

You’ll find step-by-step directions for a wide range of specific circumstances. If you need more help, Robinhood is always there. Get in touch with its dedicated customer service team with any and all questions you may have.

Other useful information:

  • Your tax documents will be ready by: February 16, 2021 
  • Robinhood Securities Federal ID Number: 38-48019216
  • Robinhood Crypto Federal ID Number: 46-436776
  • Apex’s Federal ID Number: 13-2967453

Make Filing Taxes on Your Robinhood Stocks Simple

Numbers, boxes, line deductions… filing taxes can be tedious. But it’s also a task that seems more daunting than it truly is.

Get off to the right start with a clear summary of all of your relevant income and financial information within the filing year. Robinhood streamlines this process and makes your necessary tax information easily accessible and easy to understand. You can even directly import your information to Inuit TurboTax.

Find out more about paying taxes on Robinhood stocks in its help center. Or make the switch to Robinhood if you need an investing platform that keeps tax filing simple. Users who join now get a free stock referral — look into what Robinhood can offer you today.