Taxes FAQs



  • Will I receive a 1099 Form for my account?

    Consolidated 1099 Forms are provided for regular brokerage accounts that have received dividends, interest payments on cash, insured deposits or money market balances or have reportable sale proceeds. Reportable sale proceeds include: sale of bonds, mutual funds, options, stock, and other corporate securities.

    Please note: Exempt and non-reportable accounts (some entity accounts) will NOT receive a Form 1099 from TradeKing. If you hold one of these account types and would like to request a 1099 Form be generated for your account please send us an email to [email protected] with "Request for 1099 Form" in the subject line. There is a $50 fee for this service.

    The following accounts will NOT receive a 1099 Form:
    • Accounts that have interest or dividend payments that do not exceed $10.00

    If you did not receive a 1099 Form and feel that your account has met the minimum amounts please send an email to [email protected] and we will investigate for you.

    Please consult a tax professional regarding your tax preparation questions.
  • When will I receive my 1099 Form for my account and where can I find it?

    Generally, 1099s are available by the end of the third week of February. Click here to visit our tax center for important information about the current tax year. We will notify you by email when your 1099 form is available. At that time, you can find your 1099 under My Account Records. Simply rollover My Accounts and click on My Account Records to access your 1099. Please note that your 1099 will only be available electronically. You will not receive a hardcopy by mail.

  • Maxit: What is Maxit and how does it work?

    Maxit Tax Manager helps you, the investor, easily manage the factors that determine the taxes you pay on your investments annually. Maxit's one goal is take a very complex, very tedious exercise, and make it very simple. In the next few answers, we're going to cover a couple of concepts that will help you take full advantage of the Maxit product.
  • Maxit: Cost Basis - Figuring true cost

    One of these factors is 'cost basis'. The term cost basis is often used to describe both original cost and adjusted cost, which are two very different things. Original cost is what you originally paid for a position in your portfolio. Adjusted cost is the true cost of a position you hold. This is often more complicated than simply looking at the original price you paid for a stock in your portfolio. A number of things can happen which will impact the cost basis of that position - splits or mergers for example. These are known as Corporate Actions. Wash sales can also change your cost basis, as can selling only part of a larger position.
     
    In order to track the effect of these corporate actions on your own, you would need to manually track these effects using a calculator and spreadsheet or some other recording system. Maxit alleviates the need for you to worry about manual entry or any calculating - Maxit automatically adjusts for corporate action events, such as mergers, spin-offs and stock splits, and wash sales.
  • Maxit: Lots - The Building Blocks of your Portfolio

    Another important element of the Maxit service is helping you manage the sale of positions. To understand this properly, we need to explain Lots. When you buy a position, you get a number of shares at specific price on a specific date. When you buy that position more than once you have different groups of shares each identified individually as lots with differing quantities, prices, and purchase dates.
     
    Symbol Opened Quantity Price
    ABC 01/22/2006 100 $19.45
    ABC 02/15/2006 150 $23.18
    ABC 03/05/2006 150 $30.15

    Each of these purchases represents one lot. Though your broker displays this as one position of 400 shares, it actually consists of these individual purchases as far as the IRS is concerned.
     
    Lots play an important role in managing your after tax results. Since each lot has its own cost basis, it's important to select the right ones when you are closing a position so you achieve the best tax result for your particular situation. Maxit is designed to make this as simple as possible.
  • Maxit: Tax Strategies - Taking Control of your after-tax outcomes

    Maxit has a number of Tax Strategies which are very easy to set up. Setting a Tax Strategy determines which lots get sold when. This is a large part of what determines after tax results. The reason that this plays such an important part in your tax outcomes is that the lot you select will ultimately determine your gains and losses. If you've had a good year and your investments are up in value, for example, you might want to reduce those gains by selecting lots which maximize your losses, thus reducing the taxes you would pay for the year. Maxit has Tax Strategy settings which automatically manage all of this for you.
     
    You can learn more about these Tax Strategies here: Maxit: What is First in First Out, Last In Last Out, Minimum Tax, Maximum Loss and Average Cost?
     
    To adjust the Tax Strategy settings for ALL your trades, first login to your TradeKing account, then go to Accounts > Maxit Tax Manager > Preferences. If you'd rather adjust your Tax Strategy for a specific trade, click on the Raw Trades link at the top of the page. Here you can choose a specific Tax Strategy for each trade you've placed in the previous year.
  • Maxit: How do I get started?

    1. Check to see if your information is complete
    First thing to do is to check out the Action Items table in the upper left hand corner of the screen. If you have anything other than a zero for Seed Positions, Incoming Transfers, or Other Items, it means we need some information from you.
     
    We only need information for those positions you have transferred from other brokerages or which existed at TradeKing prior to January 1, 2006. If you have any Incoming Transfers or Seed Positions, just click on the number next to the heading. (If you don't have any, then you're done! Move on to the next section.)
     
    This will take you to a list of positions in your account that don't have purchase information. You will need to check your old statements and statements for these positions to fill out the necessary information. There are more instructions for handling this process on the purchase information pages.
     
    2. Select a Tax Strategy
    Go to the Tax Strategy page, you can find it under the Preferences section in the menu at the top of the page. From here you can select the tax strategy that best suits your needs. The Tax Strategy defaults to 'First in, First Out' or FIFO, which is what the IRS accepts if you don't specify another method. All accounts are defaulted to FIFO until you change it to something else. Check out the help section on that page for more details on setting your Tax Strategy.
     
    3. Try a couple of Reports
    The Unrealized and Realized Reports are good for checking your current gain/loss situation. You can find both of these as separate tabs at the top of the page.
     
    You can also try a Schedule D, but these are only for the end of the year and if you didn't have transactions in the previous year, there won't be a report for you to generate yet.
     
    4. Congratulations
    You are well on your way to maximizing your after-tax performance! There are additional pages to learn about but they aren't critical to your every day use of Maxit. You can explore these other pages and just check out the help link to understand the purpose and function of the page. Just for reference, these other pages are the Transaction Ledger and Raw Trades Pages - you can find them under the Views menu at the top of the page.
  • Maxit: What are 'Incomplete Positions'?

    The Incomplete Positions on the Maxit Dashboard indicates which positions require additional purchase information so that Maxit can provide accurate gain/loss values for your portfolio.
     
    Seed Positions - Stocks, Bonds, Funds or Options which you held at the brokerage prior to the activation of Maxit which require additional purchase information. You can check your old trade confirmations and statements for this information.
     
    ACAT - Stocks, Bonds, Funds, or Options which you have transferred into the account which require additional purchase information. You can check your old trade confirmations and statements for this information.
     
    Other Items - Stocks Bonds, Funds or Options which require additional purchase information but are not categorized as transfers or seed positions.
  • Maxit: What is the 'Gain/Loss Snapshot'?

    The Gain/Loss Snapshot is a quick reference point for checking the performance of your portfolio (s). This information is also available in the My Portfolio section of the Dashboard page. You can generate Unrealized and Realized Gain/Loss Reports from this point as well, just click on the value for either one.
  • Maxit: Unrealized and Realized Gain/Loss?

    Unrealized Gain/Loss is the value of the positions you have not sold or covered. Because you have not sold or covered these positions and locked in the gains and losses, this value will go and up down as the market value changes.
     
    Realized Gain/Loss is the value of the positions you have sold or covered and thus you have locked in those gains or losses.
  • Maxit: Why do I have to input Purchase Information?

    The Incoming Transfers Summary lists all the positions that have been transferred into your account, but has not been updated with purchase information. Since they were originally purchased at another brokerage, we don't know what you purchased this position for originally. For example, you might 100 shares of XYZ stock which you bought at two different times in another brokerage. That means that you now need to enter that information so we can accurately present your cost basis. The best place to retrieve this information is from old statements or trade confirmations. It's not much fun, but the savings to you in the long run will be well worth it!
  • Maxit: How do I input Purchase Information?

    1. Start by reviewing the list of transfers and deciding which one you'd like to start with. Each row of the table has an "Edit" link on the far right.
     
    2. Select the "Edit" Link. This will take you to the next screen where you can actually enter the information.
     
    3. The Purchase Information table starts out with just one row. If you only have one lot, then you simply will enter the information for each field
     
         a. Acquisition Date - The date you bought or received the position.
         b. QTY - The number of shares you purchased.
         c. Cost - Enter the total cost of the transaction.
     
    4. Now, if you have more than one lot, i.e. multiple purchases of the same position, then you have to go ahead and use the "Add Line" function. Simply add a number of lines equal to the number of lots you purchased and enter the required information.
     
    5. Hit Save.
     
    6. Move on to the next transfer in the table!
     
    Note: You can always go back and edit this information. The positions you have completed are stored and placed in the Completed Items table.
  • Maxit: What is the Incoming Transfers Summary?

    This is a list of any transfers you've received into your account for which we don't have the necessary purchase information.
  • Maxit: What are Completed Items?

    Completed Items are those positions for which you've already provided purchase information. We list them here in case you need to edit them again for any reason.
  • Maxit: What is First In First Out, Last in First Out, Minimum Tax, Maximum Loss, and Average Cost?

    These 5 options are the settings that will help you manage your after tax portfolio performance.
     
    First In First Out (FIFO) - Selecting this option will result in those lots which you purchased first to be sold first.
     
    Last In First Out (LIFO) - Selecting this option will result in those lots which purchased last to be sold first.
     
    Minimum Taxable Gains (MinTax) - Selecting this option will allow the Maxit system to determine the best lot to sell to minimize your after tax gains, thus lowering your tax burden.
     
    Maximize Taxable Gains (MaxGain) - The MaxGain setting will sell lots first that would realize the largest taxable gain. This strategy should be used with care since it's ultimate effect is to increase your tax burden.
     
    Average Cost (Avg Cost) - Average cost applies only to Mutual Fund investments. Using this method averages the total cost of your mutual fund position across all of your tax lots. Average cost can only be applied from the beginning of a year and once it is selected you cannot change it without permission from the IRS or until you sell out that position entirely.
  • Maxit: Why do I have to select security type when I change my Tax Strategy?

    Maxit provides a number of tax strategies or lot relief methods from which to select: FIFO, LIFO, MinTax, MaxGain, and Average Cost. Average Cost can only be applied to mutual funds. As a result when selecting Average Cost as your method, you need to specify that you are applying it to the Mutual Fund security type. The other methods can be applied against any type of security.
  • Maxit: Where is a Versus Purchase or Specific ID option?

    The Raw Trades tab provides a full list of all your purchases and sells. Go there and find the sell transaction to which you want to apply Versus Purchase. Each sell has an edit option at the end of the row.
     
    - Select the Edit link and the details of the sell will be displayed at the bottom.
    - Select Versus Purchase from the dropdown.
     
    TIP: If you know you want to apply a FIFO, LIFO, MinTax, or Max Gain to this particular sell, you can simply pick one of these from the drop down and save. The versus purchase option, however, is available if you
     
    - Hit the 'Next' Button
    - A new interface will be displayed with the lots you currently hold in that position
    - Enter the number of shares to be applied against the lots displayed.
    - Click 'Save'.
  • Where can I find my Schedule D and Gain / Loss information?

    Maxit Tax Manager imports and tracks trade data from the site and is able to generate prepared Schedule D’s and form 8949 to show a record of Gain and Loss for the year, on both covered and non- covered securities, according to the IRS reporting rules. Schedule D & 8949 documents are generally available for download by the first week of February for the previous tax year's transactions. You can locate your Schedule D and 8949 while logged into your account at My Accounts > My Account Records > Maxit Tax Manager > Tax Reports.

    Maxit enables you to select tax purchase lots and view trade match-ups in the Raw Trades section, which update within a business day to be included in the Schedule D and 8949 forms generated by Maxit. That information can also be downloaded in a TXF file, which many electronic tax programs can upload. Your tax software's customer support can assist you in determining how to import that file into their specific software. You can download a TXF file from the Tax Reports tab of Maxit.

  • Can I import my 1099 form directly to TurboTax®?

    Yes. When asked by TurboTax® "How do you want to enter your 1099-B into your return?" click the radio button that says "Import from my bank or brokerage" and select Apex Clearing Corporation from the choices below. Then enter the following User ID and Password:

    User ID: Your eight digit account number
    Password: Your account Tax ID (usually your Social Security Number) with NO dashes

    1099 data is generally available for import by the middle of February.

    Please note *** There may be limitations to the amount of transactions that can be downloaded through third party software providers.
  • I filed my taxes based on an original 1099, what should I do now that I have received a corrected 1099?

    1099 corrections occur as a normal course of business. If you receive a correction and have already filed taxes, please review the corrections and consult with a tax professional on what is required.

  • Why are the Gain & Loss Realized/Unrealized pages not reflecting my recent Tax Lot Allocation Changes.

    Maxit Tax Manager and the Realized/Unrealized Gain & Loss pages of the website are independent of the Tax Lot Allocation tool. Any changes you make using the Tax Lot Allocation tool will not automatically update within the Maxit Tax Manager tool or on the Realized/Unrealized section of the website. If an investor decides to adjust a tax lot selection using the Tax Lot Allocation tool and would like our Gain & Loss pages and Maxit Tax Manager to reflect the same selection, an update will need to be made by the investor to Maxit Tax Manager. Once a change is made in Maxit Tax Manager, TradeKing's Gain & Loss pages will typically update overnight. To learn more about using Maxit Tax Manager, please read our Maxit Tax Manager FAQ's.
  • How much can I contribute to my IRA?

    The IRA contribution limit for 2015 and 2016 is $5,500 or $6,500 if you’re age 50 or older at the end of the calendar year. There may be limitations to the amount you can contribute based on your filing status and income. Any specific questions regarding your filing status or the potential limitations should be directed towards a tax professional as TradeKing does not provide tax advice. Additional information about IRA contribution limits can be found by clicking here.