I have long dreaded the tax situation that comes along with investing—mostly because it always seemed impossible to grasp what would be impacted. Ever since I started working, I’ve exclusively done my taxes through TurboTax for free. It was always so easy that I feared the day I began investing; I knew that simplicity would be taken from me, and I would possibly have to pay the government more money just to file my taxes!
Instead of letting the tax fear swallow me whole, I downloaded all of the necessary forms and did my taxes—exclusively for you (the government already knows every detail)! In addition to my W2, now that I have a brokerage account and three savings accounts, I have four different Form 1099s that declare the interest I made on those balances (the good kind). My Charles Schwab brokerage account form also has dividend income and foreign tax paid on a couple of the exchange-traded funds (ETFs) I own that contain some companies based in foreign countries. Since I didn’t sell any holdings in 2022, I have no capital gains to speak of.
I began my tax journey where I always do: TurboTax. With the fear of god and the government pulsing through my veins, I uploaded all of my Form 1099s separately. I had to upload my brokerage account form twice: once for interest income and once for dividend income. TurboTax fills out most of this information automatically, but I double-checked everything. Just when I thought I had reached the end, I was presented with the harrowing TurboTax upsell screen. Since I paid foreign tax on some of my investments, I needed to upgrade to the deluxe version for $39 in order to file with TurboTax.
Since I refuse to pay money to do something that is required by law, I searched around and tried some other platforms. First, I tried H&R Block, which always seems to be bragging about how much better it is than TurboTax (spoiler alert: it’s actually worse!). I didn’t get very far on H&R Block’s online tax filing platform before I had to give up. With a process as precise as filing taxes, I hoped H&R Block would mirror that precision. Instead, it was rounding all of the numbers to the nearest dollar. I uploaded my Schwab Form 1099 to capture the interest—all of $0.13—I accrued on the cash in my brokerage account. But the system kept rounding that interest down to $0, so when I tried to continue, I was told I didn’t have any interest to declare! Could you imagine me trying to explain this to the Internal Revenue Service (IRS)? I would be immediately imprisoned for tax fraud 😂.
Exasperated, I ended up on Cash App Taxes. I had to create a Cash App account first, which required me to download the Cash App mobile app on my phone. Once I created the account on my phone, it allowed me to continue on the computer with no hassle. Cash App Taxes states that it has free filing no matter what, so I had high hopes that I wouldn’t get ripped off at the end. The downside is that there’s no option to upload PDFs of all the forms, so I had to do some manual entry by copying and pasting. Cash App requires a five-digit PIN for filing, so as a first-time filer with the platform I had to enter my 2021 adjusted gross income (AGI) for the IRS to identify me. After successfully filing with Cash App Taxes, I received two emails telling me that my state and federal tax returns were accepted!
Since I expected this process to be more complicated than usual, I felt more prepared to deal with the nonsense that is filing taxes in the U.S. Have you done your taxes yet this year, or are you still putting it off? If you’ve done your taxes with investments, how did that first time go for you?