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Video: When to Use IRS Form 8949 for Stock Sales

Updated for Tax Year 2016


OVERVIEW

If you sold some stocks this year, you're probably aware that you will need to include some information on your tax return. What you may not realize, is that you'll need to report every transaction on an IRS Form 8949 in addition to a Schedule D. To find out more about form 8949, watch this video.


Hello, I'm Jill from TurboTax, with important news for taxpayers who receive a 1099-B because of stock sales.

If you sold some stocks this year, you're probably aware that you will need to include some information on your tax return. What you may not realize, is that you'll need to report every transaction on an IRS Form 8949 in addition to a Schedule D. And if you sold stocks for less than you paid for them , you need to report those losses too. Otherwise, you'll be passing up opportunities to save some money in tax.

Form 8949 tells the IRS all of the details about each stock trade you make during the year, not just the total gain or loss that you report on Schedule D.

Form 8949 doesn't change how your stock sales are taxed, but it does require a little more time to get your tax return done, especially if you're more than just a casual investor.

There are two parts to Form 8949. The first is for your short-term stock sales and the second part is for your long-term sales. This is important because short-term and long-term sales are taxed at different rates.

Your 1099-B should have all of the information that you need to report on the 8949, including whether each stock sale is short or long term.

In case it doesn't, you can figure this out yourself by separating the stocks you own for one year or less from those you own for more than one year. 

If you use TurboTax to prepare your return, you can save a lot of time, since we figure all of this out for you based on the data you key in from your 1099-B.

There are additional pieces of information that your Form 8949 will require, such as the name of the stock, the number of shares you sold, the date of each purchase and sale, the amount you paid for each stock, the amount you sold it for, and all required adjustments to the gains and losses you report. 

After you list every stock sale for the year, you'll be able to calculate your total gain or loss to report on Schedule D.

When you file with TurboTax, you don’t need to know a thing about stocks OR tax forms. We'll ask you simple questions about your 1099-B and determine the best way to get you the biggest tax refund.

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The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business.


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