A short discussion was started on Stocky's Diary about investing and taxes. Instead of filling Stocky's thread with non-Stocky stock trading stuff (say that 10 times fast! ;)) both Catrader and Stocky suggested a new thread to offer assistance and advice to us new traders.
This is my first year filing taxes with investing information. I decided to use Turbotax Premier since it handles the investing stuff better. Stocky mentioned that he had a lot of work ahead of him entering in all of his trades for last year. This version of Turbotax does offer an import mechanism to easily add your brokerage account information to the return but unfortunately, neither Ameritrade (my brokerage) nor Scottrader (Stocky's and Nica33's brokerages) allow for the import. At that point in the program there is a link to suggest a new addition to the brokerage import list so I suggested Ameritrade. At that point, I was looking at the daunting task of entering all of my 580 transactions from 2005 into Turbotax. Instead of doing this, I upgraded my Quicken 2005 Deluxe program to Quicken Premier 2006 which does a better job of handling investment information. The Quicken programs offer an easy way to download information from your brokerage and give some different ways of displaying the information (gains/losses, tax implications, monthly,quarterly/annual progress, etc.) The best part of it for me is that I could import my investing information straight from Quicken into Turbotax and save myself many hours of typing and error correcting. I recently picked up the Quicken program on Ebay for about $10-11 and Turbotax Premier for around $31 - much cheaper than you can get either in a store.
Since I and many others here are new to trading and the tax implications thereof, any advice on deductions, tax breaks or adivice on doing taxes would be greatly appreciated. Catrader recommended a book by Ted Tesser and mentioned Trader Status for filing but I have no idea what that is. ;)
Here is the list of financial institutions that can import into Turbotax:
the rest:
Hi basonista
I wanna know more about Taxes & Trading.
I'm a foreign indivdual trading through Ameritrade ....but I don't know much abt taxes, specially for a foreign individual.
Would u post details here, or send me to
[email protected] ....?
Thanks.
Bye
YUNUS
Quote from: YUNUS on March 02, 2006, 07:34:26 AM
Hi basonista
I wanna know more about Taxes & Trading.
I'm a foreign indivdual trading through Ameritrade ....but I don't know much abt taxes, specially for a foreign individual.
Would u post details here, or send me to [email protected] ....?
Thanks.
Bye
YUNUS
Unfortunately, I also need to know more about taxes and trading. ;) This thread is started to allow those with some experience in this area to help those of us that have no experiece. I'm sure your need is similar to many on the 3sof board since we have many traders that live outside the US including David, Ramsburg, Michael, Aussietrader, Rickjust, Scottishtrader among many others. Could someone outside the US help Yunus?
Yunus -- First, are you in the US?
I have filled my taxes this year using TurboTax online, not the actual software. It automatically guides you through what schedule to file according to your type of revenue. Having a tiny capital gain for 2005 (REALLY tiny.. lol), TurboTax made me file the correct form/schedule accordingly.
Livana, does the Turbotax online give you more options for importing broker information than the software? in other words, could I import my Ameritrade account into the 1099-B form online?
Gainskeeper.com is good too. Imports all your trades and prepares your Schedule 1099 D as a PDF file. Also suggests throughout the year trades you should make to max gains and minimise taxes.
Applaud basonista. Gainkeeper though very good but is not economical. Last year I downloaded a free software which prepared Schedule D. Unfortunately I forgot both its name and the link or even software itself.
In my opinion the best way could be to get a stand alone Schedule D converter and then use it with other programs.
But last year I did got some professional help so wont say I did all. But the schedule D that I prepared using free software without entering each trade, was exactly the same as the one prepared by the professional. That software took the input file from Scottrade and converted into Schedule D.
Stocky, that sounds similar to what Ameritrade is supposed to do. It allows for the download of a .txf(if I remember correctly) that is supposed to be importable into any tax program. Turbotax recognized the file but said there was nothing in it. ??? Probably an accountant or someone experienced with such things could figure out how to get it to work.
Quote from: stocky on March 03, 2006, 01:51:41 AM
Applaud basonista. Gainkeeper though very good but is not economical. Last year I downloaded a free software which prepared Schedule D. Unfortunately I forgot both its name and the link or even software itself.
In my opinion the best way could be to get a stand alone Schedule D converter and then use it with other programs.
But last year I did got some professional help so wont say I did all. But the schedule D that I prepared using free software without entering each trade, was exactly the same as the one prepared by the professional. That software took the input file from Scottrade and converted into Schedule D.
was the free software you used last year this, http://www.tradeaccountant.com/html/faq.html#G5 . it seems to be free but not sure.
QuoteYunus -- First, are you in the US?
I have filled my taxes this year using TurboTax online, not the actual software. It automatically guides you through what schedule to file according to your type of revenue. Having a tiny capital gain for 2005 (REALLY tiny.. lol), TurboTax made me file the correct form/schedule accordingly.
Thanks Livana.....
No, I'm not in US
Wanna something more abt taxes.
Bye
YUNUS
I think I found something that may interest bulk traders like me:
http://americanware.homeip.net/tk/
They have tradekeeper software which I think I used last year but it was completely free then. Even now if you have done under 100 you are good to go. I think I may try it. But will see if my other aspect of Tax Filling are simple enough for me to handle the taxes myself. But if someone try it then they can post their experience about it here.
Quote from: basonista on March 02, 2006, 04:26:11 PM
Livana, does the Turbotax online give you more options for importing broker information than the software? in other words, could I import my Ameritrade account into the 1099-B form online?
Basonista -- as tommy mentioned, you can use GainsKeeper by Scottrade. There is a way to download your closed position for any year in a TurboTax/TaxCut importable version: From "My Account">"GainsKeeper", select "Export Data" at the top, then you just chose what type of file you want (Text, Excel, Turbotax/TaxCut formats), and for what period, and there you go. Note that this is for Scottrade, but AmeriTrade should have something similar.
Now to actually answer your question: I have never use TurboTax software. This year is the first time I use any type of help to file taxes. My husband and I ended up with a whole bunch of 1099 for 2005, and I didn't know what the correct schedules to file were. I think TurboTax did an excellent job personally. It did ask me if I wanted to import TurboTax readable files as I went along, which it didn't do since I only had one trade in 2005. :D
Quote from: YUNUS on March 04, 2006, 12:35:41 AM
Thanks Livana.....
No, I'm not in US
Wanna something more abt taxes.
Bye
YUNUS
Yunus -- If you are not a US resident, I doubt you have to file taxes in the US. You should find out what your country of residence's rules and laws are regarding taxes.
another good site for reading and learning, www.traderstatus.com
hi basonista,
i just read my name as living outside the us.
i actually divide my time between wisconsin and australia but my tax status is here in the usa.
oh........and i am completely lost on the tax thing so thanks for starting this thread .
question. am i given to understand that i have to print on a form every trade?
scottrade sent me a schedule of all my trades . last year i made a loss so i wont have to pay tax right?
help (gulp)\
maXI
Quote from: rickjust on March 11, 2006, 04:13:43 PM
am i given to understand that i have to print on a form every trade?
scottrade sent me a schedule of all my trades . last year i made a loss so i wont have to pay tax right?
maXI
rick -- You have to use Form 1040, schedule D to file your trades. It will let you enter a maximum of 5 trades. If you need more space, fill form 1040, schedule D-1 and report the amount on schedule D.
As far as your loss, no, you won't have to pay taxes, and better, you can use it and deduct it from your taxable income...
hi,
only 5 trades ! need more space? i'm gonna need enough pages to fill "war and peace"
maxi :D
Get a copy of Turbo Tax Premier ($75). It sets up the forms for you. For some brokers, you can download all of your yearly trades electronically directly into the software.
JKN
I have Ameritrade and lots of trades. Ameritrade has Gainskeeper but is there a way to import the information into TurboTax without having to manually enter each trade.
Thanks.
Quote from: kslifka on March 15, 2006, 05:02:01 PM
I have Ameritrade and lots of trades. Ameritrade has Gainskeeper but is there a way to import the information into TurboTax without having to manually enter each trade.
Thanks.
kslifka(?), I also have Ameritrade and used Turbotax Premier to do my taxes. The download that I got from Ameritrade was in a tax program format that Turbotax should have been able to read. Every time I tried to import the file into Turbotax, the program said that the file was empty. I finally gave up and imported the information from Quicken. Just as fast and easy! All of the information was there and I had to correct nothing afterwards! :)
Basonista,
Thanks for your reply.
Do you have the on-line edition or desktop edition of TurboTax? I couldn't find an upload function from the on-line edition except for the the brokerage firms listed on the site, and Ameritrade wasn't listed??? I don't want to pay for the desktop if I can't get the service I need.
Thanks again.
I have the full version for PC and have never tried the online version. When it came time to import brokerage information Ameritrade wasn't one of the brokerages listed in the Turbotax program. That is when I tried and failed at the Ameritrade download file and decided to import directly from Quicken. Earlier in this thread, I posted how I went through the process of upgrading Quicken to Premier and getting both that and Turbotax on Ebay for a very reasonable price. I use Quicken daily for family finances and investments so the upgrade was natural. I have also used Turbotax for several years now but never online. Good luck!
Repost from Swing Trading MB: (March 5 - 10th post from top)
http://www.3stocksonfire.org/trading/index.php?topic=3635.450
BTW, I have used TaxAct.com (free online version) http://www.taxact.com/ for several years with great results. Yes, I only use the free version and I definitely recommend it! (free tax return, free federal e-filing and a small fee for state e-filing. Can't beat the free price and fast e-refund). :D
I did taxes this weekend.
= Those new to stock trading and doing taxes, this is important! =
= Following information is for individual USA trader who is required to do IRS tax filing (this is not legal tax advise. Consult your own accountants for tax issues.) =
Stocking trading gain/loss information must be reported to the Internal Revenue Service on 1040 Schedule D (D-1): http://www.irs.gov/formspubs/lists/0,,id=97817,00.html
1. Stocks traded need to be grouped by the same stock symbol (I alphabetize A-Z).
2. Trades must be separated into short-term (held less than 1 year) and long-term (held more than 1 year).
3. On 1040 Schedule D, list the total number of shares and stock symbol traded, dates bought and sold (if multiple trades on same stock, put "various" for both), Sales price (Sell price), Cost price (Buy price), and Gain or Loss.
= For TaxAct, instead of putting "various" for multiple dates of transaction on the same stock, I put the earliest buy date for purchase and the latest sell date for sell. If you put "various" for TaxAct or other computer tax software, it will not process the return. If you are doing the return "manually" using IRS forms to be mailed to IRS, you can put "various" =
4. If you need more space, use 1040 Schedule D-1.
5. Capital gains tax must be paid on the gain and stock trading loss can be deducted, but there's a limit to how much you can deduct per year and you may have to spread the deduction over several years (refer to tax instructions).
I use Scottrade for stock trading, and Scottrade has a nice software called "GainsKeeper" (Home > My Account > GainsKeeper > Export Data) that allows you to export your trade activities to TurboTax/TaxCut software, Excel Spreadsheet format, or text file format.
Don't put off doing this because it does take some time if you are not using TurboTax/TaxCut software - I had thousands of transactions that had to be grouped and tallied.
I e-filed my federal and state returns (federal e-filing is free, small fee for e-filing state return) on March 6th using TaxAct and already got my returns deposited in the bank! ;D
.....And one more thing you need to have present. It's very important. The wash sales rule: If you sell a stock for a loss, and buy the same stock within the 30-day period before or after the loss-sale date, the loss cannot be immediately claimed for tax purposes.
I recommend use a software that help you with this rule. Turbo tax on line do that. And the gains keeper report from Scottrade too.
Bye,
nica33 :D
The wash sale rule isn't fair because it doesn't go both ways. If you take a loss and then buy back within 30 days, you can't claim the loss in your taxes. But if you book a gain and then buy back within 30 days, you have to pay taxes on the gain. Example: I bought CRXL in October 04 at 9.50. I sold it in June 05 at 22.50. I bought it back 3 weeks later at 22.07 and am still holding now. If the wash sale rule was fair and equitable, my basis would be 9.03, I wouldn't have to pay taxes on that first sale, and I'd now be in capital gains territory. Kind of makes me want to "fix" this on my tax return.
Thanks LiveLife for the website. You guys are in top of everything!!! ;)
I just filled my taxes this weekend.
Everything worked out very good,
rafael
What is the rate for long term vs short term. I think is 20% vs 35% or something like that
Quote from: YUNUS on March 04, 2006, 12:35:41 AM
No, I'm not in US
Wanna something more abt taxes.
Bye
YUNUS
I asked ameritrade to open an account (non-US resident) and they told I can open one. I also have to fill up Form W-8BEN. I think to get Tax benefits you must reside in a country that has Tax Treaty Benefits with US so you dont have to pay tax in US.
Does anyone pay estimated taxes? The last two years I have been hit with a penalty charge for not paying estimated taxes since I made a material amount of income from stocks. When you pay estimated taxes, do you just guesstimate how much money you've made in stocks for the quarter and send the IRS 20-25% of it?