Income Tax on Fidelity Account Opening Bonus

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tibbitts
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Income Tax on Fidelity Account Opening Bonus

Post by tibbitts »

I received a $100 addition to my balance for opening a Fidelity Cash Management account with $50. Fidelity is showing this as "miscellaneous income", and isn't reporting it (less than $600), but I'm assuming it should be listed as miscellaneous income on my tax return? Also Fidelity report is mistakenly showing $200, which they've said I should contact them about fixing next week. For anyone else who opened an account, you might want to verify that the amount recorded is correct, even if it's not sent to the IRS. Fidelity says my extra $100 (which I didn't receive) came about because I made an inquiry about the promotion and somehow that translated into posting the transaction twice. Since it doesn't show on a 1099, I might have missed the error completely. I was expecting the amount would be on some flavor of 1099, but apparently not, due to the dollar value being too low.
terran
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Re: Income Tax on Fidelity Account Opening Bonus

Post by terran »

Yes, this should be reported. I have a reportable Merrill Edge bonus reported on 1099 MISC that I intend to report as Other income and a Capital One bonus reported on 1099 INT that I intend to report as Interest Income. I would think a Fidelity bonus would be more equivalent to Merrill Edge bonus (brokerage, not bank) so I'll Probably report it as Other Income too in the absence of a 1099 telling me otherwise. The tax is the same either way, so it doesn't really matter.

I'm also seeing $200 in the YTD tax info for 2021 for a $100 Fidelity bonus. Since they won't be sending a 1099 I'm not sure I see the point in contacting them to get it fixed?
Last edited by terran on Sat Jan 29, 2022 11:06 am, edited 1 time in total.
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8foot7
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Re: Income Tax on Fidelity Account Opening Bonus

Post by 8foot7 »

terran wrote: Sat Jan 29, 2022 11:02 am Yes, this should be reported. I have a reportable Merrill Edge bonus reported on 1099 MISC that I intend to report as Other income and a Capital One bonus reported on 1099 INT that I intend to report as Interest Income. I would think I Fidelity bonus would be more equivalent to Merrill Edge bonus (brokerage, not bank) so I'll Probably report it as Other Income too in the absence of a 1099 telling me otherwise. The tax is the same either way, so it doesn't really matter.

I'm also seeing $200 in the YTD tax info for 2021 for a $100 Fidelity bonus. Since they won't be sending a 1099 I'm not sure I see the point in contacting them to get it fixed?
I was wondering the same thing, who cares what they think if their amount is wrong but they’re not reporting it? I’ll report correctly on my end and that’ll be that.
jimmyg
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Re: Income Tax on Fidelity Account Opening Bonus

Post by jimmyg »

I'll report my $100 bonus as "other income" on 1099-MISC.

As far as I can tell, it looks like everyone who received the $100 bonus is seeing this reporting error. Some folks also asked about this error in the "Fidelity as a one stop shop" thread. It's a bit concerning that Fidelity did not notice/fix such a simple error right away without customers having to ask about it. And Fidelity's excuse of the error occurring because customers inquired about their bonus seems rather flimsy; I did not inquire about my $100 bonus and still got the error. :?
jimmyg
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Re: Income Tax on Fidelity Account Opening Bonus

Post by jimmyg »

Looks like Fidelity finally corrected my account today to show the $100 bonus as $100 instead of $200. I doubt they'll send me a Form 1099-MISC since it's less than $600, but at least there's no more discrepancy...
terran
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Re: Income Tax on Fidelity Account Opening Bonus

Post by terran »

jimmyg wrote: Tue Feb 01, 2022 7:52 pm Looks like Fidelity finally corrected my account today to show the $100 bonus as $100 instead of $200. I doubt they'll send me a Form 1099-MISC since it's less than $600, but at least there's no more discrepancy...
Same for me
elvistcb
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Re: Income Tax on Fidelity Account Opening Bonus

Post by elvistcb »

I had the $200 issue as well and I noticed today it is $100. I never contacted them about the bonus or the error so maybe this was indeed a universal error for all that got fixed on its own.

Question if any one knows, I have turbo tax desktop and I have an error because the 1099 I entered for this doesn't have an ID number for Fidelity. Will I be able to get thru e-file ok? It looks like it is getting through error check to filing but not sure. Thank you.
sycamore
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Re: Income Tax on Fidelity Account Opening Bonus

Post by sycamore »

elvistcb wrote: Wed Feb 02, 2022 11:19 pm I had the $200 issue as well and I noticed today it is $100. I never contacted them about the bonus or the error so maybe this was indeed a universal error for all that got fixed on its own.

Question if any one knows, I have turbo tax desktop and I have an error because the 1099 I entered for this doesn't have an ID number for Fidelity. Will I be able to get thru e-file ok? It looks like it is getting through error check to filing but not sure. Thank you.
You'll be able to get through e-file.
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HueyLD
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Re: Income Tax on Fidelity Account Opening Bonus

Post by HueyLD »

elvistcb wrote: Wed Feb 02, 2022 11:19 pm Question if any one knows, I have turbo tax desktop and I have an error because the 1099 I entered for this doesn't have an ID number for Fidelity. Will I be able to get thru e-file ok? It looks like it is getting through error check to filing but not sure. Thank you.
Fidelity’s EIN is 04-3523567 and this number hasn’t changed in many years.
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anon_investor
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Re: Income Tax on Fidelity Account Opening Bonus

Post by anon_investor »

jimmyg wrote: Tue Feb 01, 2022 7:52 pm Looks like Fidelity finally corrected my account today to show the $100 bonus as $100 instead of $200. I doubt they'll send me a Form 1099-MISC since it's less than $600, but at least there's no more discrepancy...
If Fidelity has to send a 1099-B already, would they not send a Consolidated 1099 including the the 1099-MISC?
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HueyLD
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Re: Income Tax on Fidelity Account Opening Bonus

Post by HueyLD »

anon_investor wrote: Thu Feb 03, 2022 7:20 am
jimmyg wrote: Tue Feb 01, 2022 7:52 pm Looks like Fidelity finally corrected my account today to show the $100 bonus as $100 instead of $200. I doubt they'll send me a Form 1099-MISC since it's less than $600, but at least there's no more discrepancy...
If Fidelity has to send a 1099-B already, would they not send a Consolidated 1099 including the the 1099-MISC?
There won’t be a 1099-MISC if the amount is less than $600. However, the bonus is taxable with or without a 1099-MISC.
jimmyg
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Re: Income Tax on Fidelity Account Opening Bonus

Post by jimmyg »

anon_investor wrote: Thu Feb 03, 2022 7:20 am If Fidelity has to send a 1099-B already, would they not send a Consolidated 1099 including the the 1099-MISC?
The only activity I had with Fidelity in 2021 was depositing $50 to get the $100 bonus, so I don't think Fidelity will issue any Form 1099 for me. But if they did issue a consolidated Form 1099 for me, then it probably would have a 1099-MISC section (at least my Merrill and Vanguard consolidated Forms 1099 do).

I was hoping to make new investments at Fidelity, but this error is giving me second thoughts. This particular "doubling" error was easy to notice. But what if the error was more difficult to see? Obviously, one should try to verify the amounts, but I suppose some amounts can be complicated / very difficult to double-check, so sometimes you might need to assume what the brokerage reports for you is correct.
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anon_investor
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Re: Income Tax on Fidelity Account Opening Bonus

Post by anon_investor »

jimmyg wrote: Thu Feb 03, 2022 8:58 am
anon_investor wrote: Thu Feb 03, 2022 7:20 am If Fidelity has to send a 1099-B already, would they not send a Consolidated 1099 including the the 1099-MISC?
The only activity I had with Fidelity in 2021 was depositing $50 to get the $100 bonus, so I don't think Fidelity will issue any Form 1099 for me. But if they did issue a consolidated Form 1099 for me, then it probably would have a 1099-MISC section (at least my Merrill and Vanguard consolidated Forms 1099 do).

I was hoping to make new investments at Fidelity, but this error is giving me second thoughts. This particular "doubling" error was easy to notice. But what if the error was more difficult to see? Obviously, one should try to verify the amounts, but I suppose some amounts can be complicated / very difficult to double-check, so sometimes you might need to assume what the brokerage reports for you is correct.
Yeah, I have Vanguard and Merrill accounts too and I am used to getting a consolidated 1099.

My Fidelity account says I will receive a 1099 (I assume because I had over $10 of dividends), so we shall see if they include the 1099-MISC. Though it also says my spouse's individual taxable will get a 1099, and she had less than $10 worth of dividends, so maybe it's because of the 1099-MISC?

I will just manually create a 1099-MISC entry in Turbo Tax if I don't get a form.
elvistcb
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Re: Income Tax on Fidelity Account Opening Bonus

Post by elvistcb »

HueyLD wrote: Thu Feb 03, 2022 7:17 am
elvistcb wrote: Wed Feb 02, 2022 11:19 pm Question if any one knows, I have turbo tax desktop and I have an error because the 1099 I entered for this doesn't have an ID number for Fidelity. Will I be able to get thru e-file ok? It looks like it is getting through error check to filing but not sure. Thank you.
Fidelity’s EIN is 04-3523567 and this number hasn’t changed in many years.
Thanks !
feehater
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Re: Income Tax on Fidelity Account Opening Bonus

Post by feehater »

Sorry to bring this back up, but spouse and I each created new brokerage accounts at fidelity just for this bonus. In each of our cases fidelity actually created a ‘de minimus’ consolidated 1099 for less than a dollar of dividends. Yet the 1099-misc portion has 0s. I am still supposed to change that to 100 in the misc section in TurboTax, even though fidelity couldn’t be bothered to enter it? I understand having a minimum reporting threshold, but if they’re going to make a 1099 anyway they should at least have it right?
Topic Author
tibbitts
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Re: Income Tax on Fidelity Account Opening Bonus

Post by tibbitts »

I don't know the correct answer, but if I don't get a 1099, I'm guessing I should enter the $100 as "Miscellaneous" income, and not manufacture a 1099. A few years ago I received $100 for a referral bonus and I believe that was the suggestion I got here at the time.
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anon_investor
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Re: Income Tax on Fidelity Account Opening Bonus

Post by anon_investor »

feehater wrote: Sat Feb 12, 2022 2:23 pm Sorry to bring this back up, but spouse and I each created new brokerage accounts at fidelity just for this bonus. In each of our cases fidelity actually created a ‘de minimus’ consolidated 1099 for less than a dollar of dividends. Yet the 1099-misc portion has 0s. I am still supposed to change that to 100 in the misc section in TurboTax, even though fidelity couldn’t be bothered to enter it? I understand having a minimum reporting threshold, but if they’re going to make a 1099 anyway they should at least have it right?
I find it interesting they even bothered with a de minimus 1099-DIV, because other brokerages would not have generated anything.
jebmke
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Re: Income Tax on Fidelity Account Opening Bonus

Post by jebmke »

tibbitts wrote: Sun Feb 13, 2022 1:30 am I don't know the correct answer, but if I don't get a 1099, I'm guessing I should enter the $100 as "Miscellaneous" income, and not manufacture a 1099. A few years ago I received $100 for a referral bonus and I believe that was the suggestion I got here at the time.
Yes; just jam it in on Schedule 1 line 8
Don't trust me, look it up. https://www.irs.gov/forms-instructions-and-publications
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