Do I need to enter every stock transaction to file US tax returns?

It is Tax season in the US. Federal income taxes are due on April 15.

A few clients recently asked me “Do I need to enter every stock transaction if i use an online tax prep software (such as Turbo Tax or Tax Act) and it cannot import transactions from Interactive Brokers? or Do I have to use the desktop version?

Now I do not provide tax advice but this is what I did. I used Turbo Tax online for my tax filing.

For the Investment Income category, Add your broker account information (name and account number). Instead of typing each transaction just take the sum total for each category from the 8949 form provided by Interactive Brokers.
You will need to enter two numbers (a) Total Proceeds and (b) Total Cost Basis. If there are any adjustments, add those as well. (rare)

Indicate by clicking the checkbox that you will mail the detailed statement to IRS.

Do the above for each category (Box A,B,D,E,X for Turbo Tax) as applicable. Some of you may not have all these categories. Each category is on a new page of the 8949 document from IB.

You can e-file your returns and then within 3 days you have to mail the Form 8949 and 8453 to IRS. The form 8453 will be generated by Turbo Tax or you can simply download it from the IRS website. Its a one page form where you just need to tick the box for Form 8949.

If you are e-filing your tax return, then mail your statements along with Form 8453 to:

Internal Revenue Service
Attn: Shipping and Receiving, 0254
Receipt and Control Branch
Austin, TX 73344-0254

If you are not e-filing, then mail your statements with your entire tax return to your local IRS office.

Yes, this is not as easy as importing your document. However, this is pretty painless. Just need to type in few entries. Print your 8949 and 8453 and mail to IRS.

Hope this helps
Adib

About Adib Motiwala

Portfolio Manager at Motiwala Capital LLC
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