The Motley Fool Discussion Boards
Financial Planning / Tax Strategies
|Subject: Re: Tax Forms||Date: 1/13/1999 12:43 PM|
|Author: mathetes||Number: 8339 of 121565|
I am currently a college freshman who has begun trading online. Since this is the first time I have traded I am quite confused about how investment taxes apply to me.
Even though you're a college freshman, you must have filed IRS tax returns before, just to account for summer or part-time jobs and be able to get a refund. Accounting for your profits or losses from trading isn't a lot more complicated. It goes on Schedule D of the 1040 Form. You can get a copy of the form and some instructions for it from the IRS site below.
The main thing you should be doing is keeping records of the purchases and sales, dates, prices, numbers of shares, etc. Your on-line broker probably has a summary statement that you can get directly on-line (I know mine does), so that's not a big deal either. The broker will report to the government your bottom line earnings/losses, in much the same way that an employer reports summary figures. Your numbers will be expected to agree with theirs (of which you'll also be sent a copy).
The first time I bought a house the prospect was pretty daunting. Then I told myself that a lot of other people in this world seem to have survived; it couldn't be all that difficult. You'll find that filling out tax forms for these transactions is mostly tedious, not complex.
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