Tax Topics for Investors - Fidelity (2024)

FAQs

Do I have to pay taxes on Fidelity investments? ›

Gains from the sale of securities are generally taxable in the year of the sale, unless your investment is in a tax-advantaged account, such as an IRA, 401(k), or 529 plan. Generally, for those accounts, you only incur taxes when you start taking withdrawals.

Capital gains, dividends, and interest income

Most investment income is taxable. But your exact tax rate will depend on several factors, including your tax bracket, the type of investment, and (with capital assets like stocks or property) how long you own them before selling.

Fidelity does not provide legal or tax advice. The information herein is general in nature and should not be considered legal or tax advice. Consult an attorney or tax professional regarding your specific situation.

Top Tax-Efficient Mutual Funds for Bond Exposure

Fidelity's muni funds have long rated among Morningstar's favorites, including Fidelity Intermediate Municipal Income, Fidelity Municipal Income, and Fidelity Tax-Free Bond.

IRS regulations require Fidelity to withhold federal income tax at the rate of 10% from your total withdrawal unless your withdrawal is from a Roth IRA, or unless you elect otherwise.

Where Fidelity shines. Well-rounded offering: Fidelity Investments offers $0 trading commissions, no account fees that can erode returns, a swath of research offerings and an easy-to-use platform that advanced traders can customize. Mutual funds: Fidelity has a strong reputation for its mutual funds.

Protecting your assets

With our Customer Protection Guarantee, we reimburse you for losses from unauthorized activity in your accounts. We also participate in asset protection programs such as FDIC and SIPC to help provide the best service possible.

The IRS Form 1099-B is part of the non-exempt Fidelity Tax Reporting Statement and is also part of the information that we are required to report to the IRS.

Fidelity was voted the most trusted wealth management company for 2023, earning top rankings for "financial soundness, quality of products and services, protecting privacy and security, and sensitivity to customer needs."

Are Vanguard or Fidelity funds better? ›

Overall, however, Fidelity is a better fit for investors and traders who want a more high-tech experience, technical analysis tools, advanced charting, and access to a broader range of offerings. In fact, Fidelity is our overall pick for the best online broker in 2024, so it is very hard to beat.

The IRS Form 1099-B is part of the non-exempt Fidelity Tax Reporting Statement and is also part of the information that we are required to report to the IRS.

Even if the value of your stocks goes up, you won't pay taxes until you sell the stock. Once you sell a stock that's gone up in value and you make a profit, that's when you'll have to pay the capital gains tax. When the value of your stocks goes up, but you haven't sold them, this is known as "unrealized gains."

Fidelity calculates and reports the portion of tax-exempt interest dividend income that may be exempt from your state and/or local income tax for the state-specific funds in the “State/Local Tax- Exempt Income from Fidelity Funds” section of your 2023 Tax Reporting Statement.

Unlike an IRA or a 401(k), you can withdraw your money at any time, for any reason, with no tax or penalty from a brokerage account. How the returns from these accounts are taxed depends on how long you have held an asset when you choose to sell it.