Are you ready for tax season? You may not be, but your tax software is. Let’s put TaxAct to work! Please follow the illustrated instructions below.
*Please Note: Importing tastyworks data requires TaxAct Premier+ or better and can only run on Windows. Additionally, there is a 2,000 transaction limit when importing your transaction data (Form 8949 & Schedule D). To read more about this limitation and find possible solutions, please click here. Also, although the images below are from 2017 there is no change for 2018.
Start by launching TaxAct and make sure that you have all of the necessary updates to your software. Updates to the software are usually retrieved when you launch the software. If your version of TaxAct needs an update, then you will be prompted.
- Importing Securities Data (Consolidated 1099: Short-term, Long-term, and Unknown term)
- Did you receive a "Your request the maximum tax records" error? (Manual filing instructions)
Importing Securities Data
After launching TaxAct, the first thing you’ll want to do is head to the Federal tab by clicking it.
Once inside the Federal tab, scroll down into the tab window and click Investment Income. The items inside Investment Income will expand. Click 1099 Import to proceed to the next step.
Click Electronic Import.
A window will pop-up prompting you to select your brokerage. Select tastyworks from the drop-down menu, then click Continue.
After selecting tastyworks, enter your tastyworks account number (for example, 5UT12345) and social security number/TIN (without dashes). Then, click Continue. Please remember to only enter a non-ira, or non-qualified, account in to the account number field. IRA accounts do not receive a 1099-B. To locate your account number, please log in to your account at tastyworks.com or click here. Your account number is listed in the blue Account Status area.
The password for entity accounts is the Tax Identification Number (TIN) associated with the account. Additionally, for a joint account, the password is the SSN of the person who initially started the joint account application.
After your 1099 data imports, you will reach the 1099 Import page. You will see a list of all your transactions. The length of your list will depend on how many transactions you performed. Scroll to the bottom of the page to continue.
After scrolling to the bottom, click Select All your transactions then click Continue.
After clicking Continue from 1099 Import, you’ll see a 1099 Import Successful prompt. Click OK to complete!
I received a "Your request the maximum tax records" error?
If your 1099 (Form 8949) had more than 2,000 transactions then chances are you received the error below. This error is caused by a limitation with TaxAct's software, which can only handle up to 2,000 transactions.
Despite this error message, you can still file manually. For instructions on how to file manually can be found on TaxAct's support page, which you can access by clicking here. We suggest referring to "#5 - Form 8949 Attachment Option" in the article. TaxAct nicely lays out step-by-step instructions.
Section 1256 Contracts: Cash-settled Index Options & Futures
Before you pat yourself on the back and relax, you may want to check and see if you traded any cash-settled index options or futures (Section 1256 Contracts). In other words, if you see a Regulated Futures Contracts section in the 1099-B Totals Summary or received a Substitute 1099-B from trading futures, then you need to this to continue. If this applies to you, then you have one more step.
If you did not trade any Section 1256 Contracts, then you may disregard the section below. To read more about Section 1256 Contracts, then please click here.
To enter your gain or loss from trading Section 1256 Contracts, you’ll need to open TaxAct’s Help section. Their Help section is in the right-hand column of the program. Click Help to expand and search for 1256, as illustrated below.
After searching for 1256, a window will pop-up with Search Results. Click 6781 - Gains and Losses from Section 1256 Contracts and Straddles located beneath the right-hand column labeled “Jump To” Links. You will be sent to Form 6781 - Election page.
When inside the Form 6781 - Elections, check any elections that are applicable to you. If you do not have any elections, then scroll down and click the green Continue button. Of course, we always suggest consulting a tax professional if you have questions about whether an election applies to you.
Now, select Part I - Section 1256 Contracts Marked to Market, then click Continue.
Before you move on to the next section of TaxAct, you will want to dig up your Consolidated 1099. Namely, you'll want to go to the Form 1099-B Totals Summary page where you can locate the Aggregate profit or (loss) on contracts from trading Section 1256 Contracts. Below, we’ve illustrated where you can find this.
|**ATTENTION FUTURES TRADERS: If you traded any futures contracts as well as any Section 1256 options, such as a cash-settled index option, then you will need to take the sum of the profit or loss in your Consolidated 1099 (pictured above) AS WELL AS the total profit or loss from Form 1099-B Futures (pictured below). Both forms can be found in the Tax Center. An example of a Form 1099-B Futures with a $542.30 profit is illustrated below:|
In this example, the Consolidated 1099 booked a $74.68 profit. You’re now ready to enter this number into the “Section 1256 Contracts” section of TaxAct. Here, you will need to enter:
- Account: tastyworks
- (Loss): if there was a loss then enter the amount here
- Gain: $74.68 (or $542.30 + $74.68, which is $616.98, if you traded futures as well)
Now you’re ready to enter the net effect of all your Section 1256 Contracts trading. Enter the account name (you can use tastyworks) and whether you made a profit or loss. You will either have a number in (Loss) or Gain, and not in both. After entering, scroll to the bottom of the page and click Continue.
Next, the software will ask if you are subject to any adjustments. If you believe you are subject to an adjustment, then please enter the amount here. Otherwise, scroll down and click Continue to review and complete this section.
Friendly Reminder: Other Income Sources
Before you celebrate and relax, if your Consolidated 1099 included a Form 1099-DIV: Dividends, Form 1099-INT: Interest, Form 1099-MISC: Miscellaneous Income, or Form 1099-OID: Original Issue Discount then you will need to report those income sources as well within TaxAct. After that, you’re all set! Now, go ahead and pat yourself on the back.