If you finished your 2013 trader tax reporting with TradeLog, congratulations! But before you forget about 2013 completely, there are a few things we recommend you do in order to avoid any future disasters.
Every year we have users of TradeLog contact us because their hard drive crashed, their computer was stolen, they accidentally deleted (or just can't find) their data files, or their files somehow became corrupted. When events like these occur, it can be extremely difficult to restore what was lost. And since you may have had positions and wash sale deferrals carried over from one tax year to the next, that information is critical in order to complete your next tax year accurately!
Our support staff has three suggestions that may protect you in case such a disaster strikes:
We find that many users do not save a permanent record of important reports for the tax year – they just assume they can always run the report in TradeLog again. But if one of the disasters we mentioned happens to you it may not be so easy.
All reports in TradeLog can be saved directly as a PDF file. We recommend you save a PDF of each of the following reports that apply to you - some reports may not be available or apply depending on your situation:
Tip: Include the tax year in the filename when you save each of these reports so that you can easily identify them (such as "2013 Form 8949").
IMPORTANT If you save these PDF files on your PC, what would happen if your PC crashes or fails? It may be a good idea to backup these PDF files to an external location – like an external drive or disk – so that you can restore them if necessary.
Some users assume we have copies of their data files stored somewhere on our servers or in a big file vault – but we do not save customer data files. Therefore, it is very important that you regularly backup your TradeLog data files in case you ever need to restore them. This is especially important once you've finished a tax year with TradeLog.
After you have ended the tax year and generated your tax reporting, we recommend you take a minute to create a backup for that file – this would be your 2013 data file.
In addition, TradeLog automatically creates your next-tax-year data file which contains all important carry-over positions and deferrals - so you don't want to lose that file. We recommend you open the next-year file and create a backup as well – this would be your 2014 data file.
IMPORTANT What happens if your PC crashes or fails and your backups are only saved on the PC? It's always a good idea to save your backup files to an external location or a cloud storage location so that you can restore them if necessary.
In recent years, more and more of our users have seen the benefit of using TradeLog all year long. By importing your trade history at least once a month, you will find that using TradeLog is even easier come tax time. But there is one important reminder you should note:
When you ended the tax year for 2013, TradeLog automatically created your 2014 tax year file. It's very important that you use the file TradeLog created to continue importing your 2014 trade history. If you had multiple accounts, your 2014 file will contain an account tab for each account you had in your 2013 file. It will also include all positions you had open at the end of 2013, any 2014 trade history you had already imported, and – most importantly – any wash sale deferrals adjusted into 2014.
IMPORTANT Some users mistakenly create new files for the next tax year instead of using the file TradeLog created, this may result in incorrect tax reporting for the next year. So whether you start using TradeLog for 2014 now, or later in the year, please make sure you use the correct data file!
We hope these three tips and instructions help you to wrap up everything for 2013 and help ensure you will be safeguarded in case any disaster strikes your computer. Check out more TradeLog tips on our blog and in our webinar archive!
Please note: This information is provided only as a general guide and is not to be taken as official IRS instructions. Cogenta Computing, Inc. does not make investment recommendations nor provide financial, tax or legal advice. You are solely responsible for your investment and tax reporting decisions. Please consult your tax advisor or accountant to discuss your specific situation.