Investing platform says my 1099 doesn't match what I received - how to handle tax filing discrepancy?

This is actually pretty common with investment platforms. The discrepancy often happens because of wash sales, dividend reinvestments, or fees that might not be obvious in your transaction history. Here's what you should do: First, download your complete transaction history for the year from the platform and compare it line by line with your records. Look specifically for reinvested dividends, which are often automatically reinvested and count as new purchases. Also check for wash sales, which happen when you sell a security at a loss and buy the same or a "substantially identical" security within 30 days before or after the sale - the loss gets deferred. If after this detailed review you still believe there's an error, you should request a corrected 1099 from the platform. They can issue a corrected form if there's a legitimate error. However, be aware that the IRS has already received the current version, so you'll need the corrected one to avoid a mismatch flag.

I had almost the exact same problem last year and found a solution using taxr.ai (https://taxr.ai). I was dealing with a $3,800 discrepancy between my records and what my broker reported on my 1099-B. I uploaded my documents to taxr.ai and they helped identify the exact transactions causing the problem - turned out to be some forex trades with complicated basis calculations and some wash sales I didn't account for. The tool analyzed both my records and the brokerage documents, highlighted the specific transactions causing the discrepancy, and even generated the proper documentation I needed to either correct my understanding or challenge the broker. Saved me hours of spreadsheet comparisons and confusion.

Just wanted to update that I tried taxr.ai after seeing it mentioned here and it actually solved my issue. I had a complicated situation with multiple 1099 forms and some freelance income. The system immediately flagged where my calculations were off (I had been double-counting some business expenses) and showed exactly how the numbers should match up. It even pointed out a deduction I was eligible for that I had completely missed! The explanations were super clear and I was able to fix everything in my TurboTax return. Seriously relieved to have this sorted before the filing deadline. Definitely worth checking out if you're dealing with tax document discrepancies.

I had a similar issue with my investment platform last year and spent WEEKS trying to get through to the IRS to get clarification. After dozens of failed attempts and hours on hold, I found Claimyr (https://claimyr.com). They got me connected to an actual IRS agent in about 20 minutes who walked me through exactly how to handle the discrepancy. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c but basically they hold your place in the IRS phone queue and call you when an agent is about to answer. The agent confirmed that I should report what's on the 1099 but file an adjustment with Form 8949 with my documentation attached. Saved me so much stress knowing I had the official IRS guidance.

I have to eat my words about Claimyr! After posting my skeptical comment, I decided to try it anyway since my situation was getting desperate (hadn't received my refund after 4 months and couldn't get through to anyone). The service actually worked exactly as promised. I got a call back in about 30 minutes letting me know they were about to connect me with an agent. Spoke with a helpful IRS representative who found that my return had been flagged for review due to an income mismatch (exactly like what the original poster is worried about!). The agent was able to verify my information and release my refund right there on the call. I've been telling everyone about this service since then. After months of frustration and anxiety, getting that call with a real IRS person on the line was such a relief. Sometimes it's worth admitting when you're wrong!

Another possibility - check if your investment platform is reporting your transactions on a FIFO (first in, first out) basis but you calculated using a different method like LIFO or specific identification. This can cause huge differences in capital gains. If you used specific identification for your calculations (choosing which shares you sold) but the platform defaulted to FIFO, that would explain the discrepancy. Unfortunately, you need to be consistent with your method and typically need to notify the broker BEFORE the sale if you're not using their default method.

I noticed nobody mentioned that you could potentially file Form 8275 (Disclosure Statement) with your return if you're going to report amounts different from your 1099. This form lets you disclose items or positions that aren't otherwise adequately disclosed on a tax return. It won't necessarily prevent an audit, but it shows you're being transparent about the discrepancy rather than trying to hide something. Include your calculation method and why you believe the broker's 1099 is incorrect.

I went through something very similar last year with a $2,800 discrepancy on my 1099-B. Here's what I learned from my CPA: First, don't panic and file with numbers you know are wrong - that can create bigger problems down the road. The key is to systematically figure out where the difference is coming from. Start by requesting your "realized gains and losses" report from your investment platform for the entire tax year. This is different from just your transaction history and will show exactly how they calculated each gain/loss. Compare this line by line with your records. Common causes of discrepancies I've seen: - Cost basis adjustments from corporate actions (stock splits, spinoffs, etc.) - Reinvested dividends that create new cost basis - Wash sale adjustments that defer losses - Different lot identification methods than what you used If you find a legitimate error after this review, document everything and request a corrected 1099 in writing. Most platforms will issue one if you can clearly show the mistake. If they won't correct it but you're certain there's an error, you'll need to report the 1099 amounts on your return but make an adjustment on Form 8949. Include a clear explanation and keep all your supporting documentation. The worst thing you can do is ignore the 1099 completely - the IRS computer will definitely flag that mismatch.