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Tip: Follow Year End Instructions Carefully

Jan 11, 2012 07:50 pm

TradeLog TipsWhen TradeLog users fail to follow year end instructions carefully, the result is often problems of some sort. From importing the needed data, to reconciling and ending the tax year – doing these steps correctly can make a difference in the accuracy of reports and more! Here are a few tips when it comes to using TradeLog at the end of the year…

There are three core areas involved with year end instructions for TradeLog users:

Importing Necessary Data: Some users fail to import all of the data TradeLog needs for calculating accurate gains and losses. The results may cause unnecessary work to correct and if not noticed in time, it could require you to file an amended tax return! Keep these points in mind:

  • Most users need to have 13 months of trade history for each tax year data file. Example – for 2011 tax year you would import trades from January 1, 2011 through January 31, 2012. That last month of data is essential for accurate wash sale calculations!

  • Traders who use MTM accounting method should only import 12 months of trade history for each tax year data file. Example – for 2011 tax year you would import trades from January 1, 2011 through December 31, 2012.

    • Verify and Reconcile: There is nothing worse than finding out you filed your taxes for a past year incorrectly. Sadly this happens to some users, but shouldn’t have to! TradeLog’s verification and reconciliation processes were designed to help identify any possible problems with your TradeLog data. So before you run your tax reporting make sure you did these two steps:

  • Verify year-end open positions – this involves confirming that TradeLog shows the same positions held open at year end as is reported on your December brokerage statement. (For details see Step 4 of our Quick Start Guide)

  • Reconcile your 1099b Sales – this step should be a final step before ending the tax year. TradeLog’s reconciliation function compares TradeLog data with the gross proceeds reported on your 1099b. A discrepancy could indicate a problem in the data. (For more details see Step 6 of our Quick Start Guide)

    • Run End Tax Year correctly: The End Tax Year function is a very important step in using TradeLog. The function is designed to transfer positions held open at year end, along with any deferred losses to the next year’s data file. For MTM users, the End Tax Year function is even more critical to properly create the mark-to-market positions at year end. Learn more in Step 6 of our Quick Start Guide.

    By following the year end instructions for using TradeLog tax time will be much easier. If you have questions or problems, contact the TradeLog support department for help!

    Tags: software, tips, tradelog
    This entry was posted on Wednesday, January 11th, 2012 at 7:50 pm and is filed under TradeLog Tips & Tricks. You can follow any responses to this entry through the RSS 2.0 feed.