TAXES and TRADING

[basonista]

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. 

[basonista]

Here is the list of financial institutions that can import into Turbotax:

[basonista]

the rest:

[YUNUS]

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

[basonista]

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?

[Livana]

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.

[basonista]

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?

[tommyt]

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.

[stocky]

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.

[basonista]

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.

[catrader]

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.

[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.

Thanks Livana.....

No, I'm not in US
Wanna something more abt taxes.

Bye
YUNUS

[stocky]

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.

[Livana]

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. 

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.

[catrader]

another good site for reading and learning, www.traderstatus.com