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Tax Tip 4: Use Schedule D
Software to Complete Reports:
For the past several
years, the IRS has worked to increase e-File
reporting. This is all part of their 80% e-File by 2007 cost savings
initiative. This is their way of forcing electronic submittal of tax
returns. It saves the government time and money because they don’t have
to manually retype our returns into their auditing system.
Check with your
broker for a list of products and tools that can read their data. They
may not endorse any particular product for security reasons but the
products may still work just fine. Schedule D software allows you to
reconcile your data and generate a report, export to popular tax software
or deliver data to your Tax Preparer.
Expect to provide
details of each investment that you sold during the tax year. If you plan
to complete your own taxes then take advantage of early sales offers to
obtain your preparation software and tools. This way you can try a few
experiments before time is critical.
The reason I
recommend obtaining data and using Schedule D software is because
otherwise someone will need to manually type each transaction into the tax
software. If you use Schedule D software you can import the data,
reconcile the reports and export to a file that your tax software can use.
Action Step -
Decide if you want to learn something new with a little help or if you
should hand this project off. If you need to hand off then gather the
information from steps 1, 2 & 3 and go to step 5. If you are ready
to learn how to generate a Schedule D from your data then let's get
started:
-
Pick one of the
software programs that you found through research and go to their web site
to find instructions for how to load data for your broker.
-
Find the companies support
e-mail address and
send them an e-mail
to ask any questions.
-
Get the software and try it. By starting on this
early you can learn a little at a time. Like riding a bike, it is
harder to describe than to jump in and try it.
-
Once you are familiar with the software things will
move faster toward completion of the Schedule D part of your tax return.
-
Schedule D
software typically includes reconciliation tool to help finish the work
and export a finished result to a file for usage by other tax software.
In addition you can print to paper.
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