Get answers to common tax questions related to your M1 accounts, including details about tax forms, IRA contributions, capital gains and losses, and more. This guide provides step-by-step information and helpful resources for certain scenarios.
Tax documents and delivery timelines
What tax forms will I receive?
The tax forms you’ll receive depend on the type(s) of account(s) you have. M1 Invest Accounts, M1 High-Yield Cash Accounts, and M1 High-Yield Savings Accounts have tax forms generated based on the activity that took place in the account.
If your account was migrated from Apex Clearing to M1 during the tax year, you may receive separate consolidated 1099s from both Apex Clearing and M1 during.
Apex Clearing is required to issue tax documents for the period in which they held your taxable account. M1 issues a 1099 for the period after the migration.
If your investment account was never cleared by Apex, or had been migrated to M1 in a previous tax year, you’ll receive a 1099 only from M1.
Based on the information above, you may receive:
A consolidated 1099 for each Apex-cleared account.
A single consolidated 1099 for all M1-cleared individual brokerage accounts.
Note: For Joint Brokerage Accounts, the primary account holder receives the 1099.
For more information on what account activity results in a tax form, please visit M1 Tax Documents.
When will my tax forms be delivered?
1099-INT (M1 High-Yield Savings): January 31
1099-R (IRA withdrawals): January 31
Consolidated 1099 (Invest Accounts & M1 High-Yield Cash): February 15*
5498 (IRA contributions): May 31
Important
*If you hold a security subject to income reclassification in an M1-cleared brokerage account, your consolidated 1099 may arrive by March 15 to reduce the likelihood of a revised 1099.
Note: Your account may be subject to a revised tax form.
Capital gains, losses, and wash sales
What are capital gains and capital losses?
Capital gain: Profit from selling a security at a price higher than your purchase price.
Capital loss: Loss from selling at a price lower than purchase price.
Tax Treatment Depends on Holding Period:
Short-term capital gains/losses: Held one year or less and are typically taxed at your ordinary income rate.
Long-term capital gains/losses: Held more than one year. For the 2024 tax year the long-term capital gain tax rates were 0%, 15%, and 20% for most taxpayers.
Note: M1 does not provide tax advice. For personal tax questions, please consult a qualified tax professional.
What is a wash sale?
A wash sale occurs when you sell or trade stock or securities at a loss and within 30 days before or after the sale you:
Buy substantially identical stock or securities.
Acquire substantially identical stock or securities in a fully taxable trade.
Acquire substantially identical stock for your Individual Retirement Account (IRA) or Roth IRA.
In a wash sale situation, the loss sale must occur in a taxable account. The wash may be triggered by a purchase in the same taxable account, a different taxable account, or a tax deferred retirement account.
Due to IRS regulations, M1 will adjust your cost basis to include the disallowed loss when both the sell at a loss and triggering purchase occur in the same account.
We will not adjust gains and losses or basis when triggering events occur in different accounts.
For more information on wash sales, check out the IRS Publication 550,
IRA Contributions
When is the deadline for making IRA contributions?
IRA contributions for the prior year can be made up to the tax filing deadline, usually April 15, not including extensions.
When making a contribution, be sure to select the correct tax year for your deposit.
Tax treatment of Traditional vs. Roth IRAs
Traditional IRA
There isn't an income ceiling for contribution eligibility
Potential earnings grow tax-deferred
Contributions may be tax-deductible based on your income and eligibility to contribute to an employer sponsored retirement account
You’re required to start Required Minimum Distribution (RMD) withdrawals at the age of 72 (73 if you reach age 72 after Dec. 31, 2022).
Withdrawals are considered taxable income
Early withdrawals (prior to age 59.5) are typically subject to a 10% premature withdrawal penalty
Roth IRA
Eligibility to contribute is limited by IRS income qualifications
Potential earnings grow tax-free
Contributions are not tax-deductible
Required Minimum Distribution (RMD) withdrawal requirements do not apply
Withdrawals of your contributions are not taxed or penalized
No taxes owed on earnings if you’ve held the account for more than five years, you’re age 59.5 or older, or a special exception applies.
Required Minimum Distributions (RMDs)
What are RMDs?
RMD stands for Required Minimum Distribution and is the amount of money the IRS says you need to withdraw from your pre-tax retirement account each year after turning 72 (73 if you reach age 72 after Dec. 31, 2022).
M1 accounts that require RMDs are Traditional and SEP IRAs, while Roth IRAs do not require RMDs until after the death of the original owner.
Important notes:
You can withdraw more than the minimum required amount.
Your withdrawals will be included in your taxable income except for any part that was taxed before (your basis) or that can be received tax-free (such as qualified distributions from designated Roth IRA).
De Minimis Tax Thresholds for Promotional Credits and Dividends
Promotional Credits
There is a de minimis threshold of $600 by the IRS for promotional credits. If the bonus received exceeds $600, a tax document is required to be generated. However, if the amount is less than the threshold, it will not be listed on your 1099.
Dividends
There is a de minimis threshold of $10 by the IRS for dividends received. If the total dividends received exceeds $10, a tax document is required to be generated. However, if the total dividend received is less than the threshold, it will not be listed on your 1099.
Note: Per IRS guidelines, income received, even if it is under de minimis thresholds, is required to be reported when filing your tax return.
M1 and its affiliates do not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only. It is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any transaction.
This content was generated using artificial intelligence and is intended for informational and educational purposes only. While reasonable efforts are made to ensure accuracy, AI-generated outputs may omit key context; and should not be construed as financial, investment, legal, or tax advice. Users should independently verify all information and consult a qualified professional before making any financial decisions.
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