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Written by Sam Pennington on March 20, 2023
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Does Robinhood Tax You When You Cash Out?

Investing in the stock market can be a profitable endeavor, but it also comes with its own set of responsibilities.

One of these is the responsibility to pay taxes on any capital gains you make from your investments.

If you are investing with Robinhood, you may be wondering if they will tax you when you cash out.

Limited Time: Robinhood 1% Transfer Bonus

If you transfer an existing brokerage account to Robinhood through January 31st 2024, you can get an Unlimited 1% Transfer Bonus.

Robinhood Transfer Bonus

For example, if you transferred a brokerage account worth $50,000 - that would be a bonus of $500.

In addition, Robinhood offers a free stock for new users as well as a 1% IRA match for retirement accounts.

Does Robinhood Tax You When You Cash Out?

The short answer is no, Robinhood will not tax you when you cash out.

However, it is important to note that you are still responsible for paying taxes on any capital gains you make from your investments.

When you sell a stock and realize a capital gain, this will be reported to the IRS.

At the end of the year, you will owe taxes on this gain when you file your tax return. Robinhood will provide you with a 1099 tax form at the end of the year that summarizes your trading activity and helps you report your capital gains and losses on your tax return.

It's important to note that if you sell a stock for a profit, it's wise to set aside a portion of that profit for taxes.

This will help you avoid being caught off guard when tax time comes around.

It's also important to keep accurate records of your trading activity, including the purchase and sale prices of any stocks you buy and sell, as well as any associated fees or commissions.

Want to learn more about taxes and Robinhood?


In summary, Robinhood does not tax you when you cash out or tax you at all. They simply report your trading activity to the IRS, where you will owe the taxes.

As an investor, it's your responsibility to keep track of your gains and losses, set aside money for taxes, and file your tax returns accurately and on time.

Don't forget to grab your free stock worth up to $200 from Robinhood today!

Article written by Sam Pennington
Sam is a personal finance writer. While in college, he dedicated his spare time to learning about personal finance, investing, and real estate. Sam currently works as a business analyst for one of the top food manufacturers in the world.

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