Maximize your tax refund

Contrary to popular belief, having investments doesn't mean only an accounting genius can prepare your tax return. Investors can easily do their own taxes while maximizing tax savings by following a few simple tips.

"Gathering all forms and information beforehand makes preparing taxes easier and faster for everyone, but especially for investors," says Jessi Dolmage, TaxAct spokesperson. "In addition to tax forms from brokerages, employers and financial institutions, you'll also want documentation about your transactions handy. That information will help prevent you from overpaying or underpaying taxes on your investments."

Many DIY tax preparation solutions import transactions directly from brokerages or provided data files. TaxAct also offers a fast spreadsheet-style entry tool for Form 1099-B, Proceeds From Broker and Barter Exchange Transactions, information that allows you to enter and review up to 2,000 individual transactions.

If you have hundreds or thousands of transactions, Dolmage recommends obtaining Form 8949, Sales and Other Dispositions of Capital Assets, that lists your transactions individually, from your brokerage or a service that will generate the form for you. You simply submit this form with your tax return.

Use these additional tips from TaxAct to save more time and money at tax return filing time.

Don't rely solely on your Form 1099s

When you receive your Form 1099-Bs in February and March, verify the information in each against your records. Look specifically for cost basis and date acquired. Whether that information is included on your form depends on how long you've held the asset and where the investment originated.

If your cost basis and acquisition date isn't included on your Form 1099-B, you still have to report that information on your tax return. Without it, any sales proceeds without a cost basis will be taxed as a capital gain.

If you're still waiting for 1099s or other investment information, Dolmage recommends preparing as much of your return as possible now, but wait to file until you receive it to avoid amending your return.

Report the correct cost basis

The cost basis is the purchase price of an asset adjusted for stock splits, dividends, return of capital distributions and any other basis adjustments. Using the correct cost basis is key to accurately reporting and calculating a capital gain versus a loss, the difference between the asset's sales proceeds and the cost basis.

Even if your cost basis is reported on Form 1099-B, check your investment records to verify it's correct. The cost basis reported on your Form 1099-B is based on the information available to your brokerage, which may not include data needed to calculate the true cost basis. For instance, the sale of certain employer stock options may be reported on your Form W-2 and Form 1099-B. If you don't adjust your cost basis for this, your sale may be taxed as ordinary income and as a capital gain.

If you need to report adjustments to cost basis amounts on your tax return, you'll include the adjusted amounts and an adjustment code next to each that explains the reason for the change.

Know the difference between short and long-term

Assets held for more than 12 months are considered long-term and benefit from reduced capital gains tax rates of zero, 15 and 20 percent based on your tax bracket. Conversely, short-term gains for assets held for less than 12 months are taxed at ordinary rates.

Verify the asset's purchase date before selecting the short-term or long-term reporting category for the transaction on your tax return. Remember, the date acquired may not be on Form 1099-B. Incorrectly reporting the term may result in overstating or understating your total tax liability.

When making future investment decisions, consider waiting to sell assets with large gains or holding periods approaching one year. Get more investment tax tips at www.irs.gov, and learn more about TaxAct's affordable filing solutions at www.TaxAct.com.

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Upcoming Tax Dates

February 10 — Social security, Medicare, and withheld income tax
File Form 941 for the fourth quarter of 2017. This due date applies only if you deposited the tax for the quarter timely, properly, and in full.

February 10 — Certain small employers
File Form 944 to report social security and Medicare taxes and withheld income tax for 2017. This due date applies only if you deposited the tax for the year timely, properly, and in full.

February 10 — Farm employers
File Form 943 to report social security and Medicare taxes and withheld income tax for 2017. This due date applies only if you deposited the tax for the year timely, properly, and in full.

February 10 — Federal unemployment tax
File Form 940 for 2017. This due date applies only if you deposited the tax for the year timely, properly, and in full.

February 10 — Employees who work for tips
If you received $20 or more in tips during January, report them to your employer Details

February 15 — All businesses
Give annual information statements to recipients of certain payments you made during 2017 Details

February 15 — Social security, Medicare, and withheld income tax
If the monthly deposit rule applies, deposit the tax for payments in January.

February 15 — All employers
Begin withholding income tax from the pay of any employee who claimed exemption from withholding in 2017, but did not give you Form W4 to continue the exemption this year.

February 15 — Individuals
If you claimed exemption from income tax withholding last year on the Form W-4, you must file a new Form W-04 by this date to continue your exemption for another year Details

February 19 — Everyone
Federal Holiday (Washington's Birthday) Details

February 28 — All businesses
File information returns (for example, Forms 1099) for certain payments you made during 2017.

February 28 — Payers of gambling winnings.
File Form 1096 along with Copy A of all the Forms W2G you issued for 2017. If you file Forms W2G electronically, your due date for filing them with the IRS will be extended to 03-31. The due date for giving the recipient these forms remains 01-31.

February 28 — All employers
File Form W3, Transmittal of Wage and Tax Statements, along with Copy A of all the Forms W2 you issued for 2017. If you file Forms W2 electronically, your due date for filing them with the SSA will be extended to 03-31. The due date for giving the recipient these forms remains 01-31.

February 28 — Large food and beverage establishment employers
File Form 8027, Employer's Annual Information Return of Tip Income and Allocated Tips. Use Form 8027T, Transmittal of Employer's Annual Information Return of Tip Income and Allocated Tips, to summarize and transmit Forms 8027 if you have more than one establishment. If you file Forms 8027 electronically, your due date for filing them with the IRS will be extended to 03-31.

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