Investing in Stocks For Dummies
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Most stock investors report their investment-related activities on their individual tax returns (Form 1040). The reports that you’ll likely receive from brokers and other investment sources include the following:

  • Brokerage and bank statements: Monthly statements that you receive

  • Trade confirmations: Documents to confirm that you bought or sold stock

  • 1099-DIV: Reporting dividends paid to you

  • 1099-INT: Reporting interest paid to you

  • 1099-B: Reporting gross proceeds submitted to you from the sale of investments, such as stocks and mutual funds

You may receive other, more obscure forms that aren’t listed here. You should retain all documents related to your stock investments.

The IRS schedules and forms that most stock investors need to be aware of and/or attach to their Form 1040 include the following:

  • Schedule B: To report interest and dividends

  • Schedule D: To report capital gains and losses

  • Form 4952: Investment Interest Expense Deduction

  • Publication 17: Guide to Form 1040

You can get these publications directly from the IRS at 800-829-3676, or you can download them from the website. For more information on what records and documentation investors should hang on to, check out IRS Publication 552, “Recordkeeping for Individuals.”

If you plan to do your own taxes, consider using the latest tax software products, which are inexpensive and easy to use. These programs usually have a question-and-answer feature to help you do your taxes step by step, and they include all the necessary forms. Consider either TurboTax or H&R Block At Home. Alternatively, you can get free tax preparation software at TaxACT.

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