Last year, I did my taxes for the first time since I started investing. This year, things are both simpler and more complicated, because why wouldn’t they be! I discovered that Cash App Taxes will let me file for free even though I paid some foreign tax on my investments—the one thing that made last year even more of a pain in the tax butt.
Cash App Taxes was hounding me to file my tax return even before my various banks got my forms together, but this was nothing compared to the TurboTax days when I would receive upward of three emails per week until I filed! The easiest part of this year’s taxes was that the account numbers and tax identification numbers for all my banks autofilled, which made the copy/paste process less intensive.
One of the first questions asked if any of the following applied to me:
Thankfully, I am not dead and proceeded to file my taxes!
I entered the interest income I received from each of my three savings accounts: my regular Fifth Third account and my high-yield accounts with SmartyPig and LendingClub. I noticed that my earned interest for SmartyPig was about 10% of the interest I received from LendingClub, which demonstrated how I use these accounts for different things. SmartyPig is used for short-term goals; money is flowing into and out of the account when it’s needed to fund these goals, leaving less money behind to accrue interest. My LendingClub account is for my intermediate-term goal of saving for property; since it has no reason to be tapped yet, it will continue increasing in value.
What made this year more difficult was reporting capital losses for the first time on some of the investments I sold from my portfolio in 2023. Besides the behavioral aspect of “losing,” the process required a lot of manual entry in Cash App Taxes, along with some creativity. (The instructions weren’t 100% clear, but I decided to follow what Charles Schwab provided me.) I had to enter the different lots of shares sold for some of the exchange-traded funds (ETFs) since I bought more shares at two different times in 2023.
I also had a 1099-MISC form for income I received as part of a settlement. Thankfully, this only required a few fields to be entered, so it was nothing compared to the investment part. The extra income likely counted against my tax refund amount, but that money went directly into my savings. This helped to increase the interest income I received from my high-yield savings accounts.
Though I will be receiving the smallest tax refund of my existence, I’m still getting a decent amount. I always have my tax refund deposited in my regular savings account, so I don’t feel the need to spend it. The state of Illinois is once again asking for more money than was already withheld from my paycheck because of the interest I received on my savings. But if I flip it on its head, my smaller tax refund could be a positive sign that I’m increasing my income. Shortly after I filed, my federal and state returns were accepted—so I will not be going to jail!
I’m hoping the process of filing my taxes will simplify itself over time, but I will keep you all updated on the process. If you have any tax horror stories, please share them in the comments below so we can all commiserate together!
Check out AAII’s annual Tax Guide for more.
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