As most of you know we have been warning for over a year now, (2011 Rockwell and 2012 Rockwell Part 2) of government changes due to new cost basis reporting requirements. While we agree with the overdue changes which in the long run, will be easier, the gravitation from non-reporting of basis, to full reporting of basis will be rocky at best. Given these facts we fully expect personal tax returns to be slightly more complicated and time-consuming this year, therefore more costly as well.
The Culprit: From 8949
Think of this new form as a catch-all for your long-term and short-term gains with a built-in column for errors. This new form, while simplifying other schedules on your return will be more time-consuming, may surprise you at first glance, and will throw all of us out of our tax comfort zone this filing season.
On a positive note, think of it as one step back to take two steps forward. In the coming years, it will get easier and we will all get more accustom synchronizing the data. (We attempt to give our realized gains and losses data in a form that is easy to transfer into tax return data, however we doubt the various outside reporting vendors will have such concerns at this time, they are still focused on capturing the data.)
Don’t Hurry to FILE your Return, But Do Rush to Get Your Information to Your Professional as Soon As Possible!
While we have strongly suggested those early filer’s wait until late March or early April to have their information electronically sent to the IRS, we do suggest you get your tax information to your professional in an extra timely manner. No one wants a tired tax professional doing their taxes !
As you know, we are not tax professionals, however we interface with many on an almost daily basis, especially during the final leg of filing season. If we all try to make each other’s lives easier, maybe this From 8949 will turn out to be a mole hill rather than a mountain!
Have a Great Day!