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  • Nick Burgess

Do You Have To Report Stocks On Your Taxes?

The following article is for entertainment and educational purposes only, and should not be considered financial advice. Please seek a licensed financial professional for any individualized advice. Some links below may be affiliate links that generate a small commission for the site at no cost to you.


Do You Have To Report Stocks On Your Taxes?

One common misconception that many younger investors have when they first venture into the world of the stock market is whether or not they need to report their investments on their taxes. As we step into tax season, many folks – from the seasoned trader to the person with a single share of stock tucked away in a Robinhood account – begin to wonder, "Do I have to report my stocks on my taxes?"

a home computer setup displaying a stock chart

The short answer is: Yes, you do. All your investment activity in the United States, whether it's on Robinhood, another investment app, or through more traditional financial institutions, typically needs to be reported to the Internal Revenue Service (IRS) every tax year. This reporting process includes not only stock sales but also dividends and income earned from mutual funds, exchange-traded funds (ETFs), and even cryptocurrency trades if you happen to trade cryptocurrency on platforms like Robinhood Crypto or any other crypto exchange.

Understanding Capital Gains Taxes

Your investment income, such as that from selling stocks on Robinhood or any other platform, is considered a taxable event. These earnings fall under capital gains taxes, which are categorized into two types: short-term and long-term capital gains. If you own stocks or other capital assets for one year or less before selling, you'll incur short-term capital gains. Any gains from assets held longer than a year fall under long-term gains. The distinction is crucial because short-term gains are taxed at your ordinary income tax rate, whereas long-term gains are usually taxed at a lower rate depending on your income level.

Keeping Track of Your Cost Basis

An essential piece of tax information to keep track of when buying and selling stocks is your cost basis. This is the original value of an asset for tax purposes, usually the purchase price. When you sell shares of stock, the difference between the sale price and the cost basis is what the IRS considers as your capital gain or loss.

Filing Your Taxes

When filing taxes, you'll need to include detailed information about your capital gains and losses. This can be a bit overwhelming, especially if you've had a busy year of trading on the Robinhood platform or other free stock trading apps. Thankfully, you don't need to navigate the tax landscape alone. A tax professional or a financial advisor can guide you. But even without one, the necessary tax forms, including Schedule D and Form 1099-B, can be sourced from your brokerage account at the end of the year.

Understanding Form 1099-B

Form 1099-B is a document provided by your broker, which includes information about your capital asset transactions. Robinhood, like other financial institutions, will provide Robinhood tax forms, including the 1099-B form to its users. This form has detailed information about your stock sales and dividend income. This information is critical for your individual tax return.

Robinhood and Crypto Taxes

For Robinhood Crypto users, the platform provides necessary tax documents that show your crypto assets transaction history. Crypto taxes are somewhat of a new frontier, and the tax rules surrounding them can be complicated. Still, it's essential to understand that selling, trading, or converting cryptocurrencies can result in a taxable event.

Deductions and Tax Breaks

A significant part of managing your tax bill involves understanding tax deductions and tax breaks. If you've had a rough current year in the stock market, capital losses might help reduce your taxable income. This is known as tax-loss harvesting. However, beware of the wash sale rule, which prohibits you from claiming a loss on a sale of a security if you buy the same or substantially similar security within 30 days before or after the sale.

Investment Advice and Tax Software

If you're a DIY investor, tax software such as H&R Block can be a handy tool during tax season. These software packages can guide you through the complexities of capital gains taxes, brokerage fees, crypto taxes, and more. While they don't replace personalized financial advice, they can be a helpful starting point.


Reporting stocks on your taxes is a must-do, whether you have a Robinhood account, another taxable investment account, or even individual retirement accounts (IRAs). Remember, your social security number is linked to these accounts, and not reporting could lead to issues with the IRS.

Always keep in mind that this article is for informational purposes only and does not constitute tax advice. For a precise understanding of how stock sales, dividends, or mutual funds influence your tax situation, or to calculate the exact amount of taxes you owe based on your tax bracket, it's always advisable to consult with a tax professional or financial advisor.

In summary, as you navigate your financial journey – from buying your first shares on a Robinhood app to more complex investment strategies – understanding the tax implications of your actions can help you make informed decisions. So, the next time someone asks, "Do I need to report my Robinhood stocks or crypto on taxes?" you'll be able to confidently answer, "Yes, you do."


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