<story><title>IRS will look into setting up a free e-filing system</title><url>https://www.washingtonpost.com/us-policy/2022/09/07/irs-free-efile-biden/</url></story><parent_chain><item><author>ryandrake</author><text>&amp;gt; A lot of asset sales should be or are reported by financial institutions, so in the case of me selling stock through Schwab or whatever, it should still be handle-able by the IRS.&lt;p&gt;Your financial institution doesn&amp;#x27;t necessarily know your capital gains. It reports stock sales to the IRS, but often doesn&amp;#x27;t report the cost basis because it doesn&amp;#x27;t know. Consider:&lt;p&gt;You buy 50 shares of ABC on Jan 1 2020. Then you buy 50 more shares on Jan 1 2022. Now you sell 50 shares of ABC on Jul 1 2022. Which bunch of shares did you sell? Was it a short term gain or a long term gain? Was it a loss? It depends. Neither your broker or IRS knows the answer, but you do.&lt;p&gt;EDIT: The above information is evidently out of date by about 10 years. TIL</text></item><item><author>TulliusCicero</author><text>&amp;gt; The challenge is that you personally need to report additional information for things like capital gains tax on asset sales, any credits&amp;#x2F;deductions you wish to claim, and changes in your living arrangements or life status.&lt;p&gt;Two things:&lt;p&gt;1. A lot of asset sales should be or are reported by financial institutions, so in the case of me selling stock through Schwab or whatever, it should still be handle-able by the IRS.&lt;p&gt;2. Okay yes, it&amp;#x27;s reasonable for me to put in my living status changes or tax deductions I want to claim, but they don&amp;#x27;t ask &lt;i&gt;just&lt;/i&gt; for that, they ask for all the other shit too, all the stuff they already know the answer to. Why?</text></item><item><author>BitwiseFool</author><text>&amp;gt;&amp;quot;There&amp;#x27;s no reason the government couldn&amp;#x27;t just tell me how much money they took each year and give me a chance to contest it if I thought it was wrong.&amp;quot;&lt;p&gt;Behind the scenes, the IRS already has a well informed idea of how much you owe, based on the information submitted to them by your employer and a few select third parties - such as your bank or broker. The challenge is that you personally need to report additional information for things like capital gains tax on asset sales, any credits&amp;#x2F;deductions you wish to claim, and changes in your living arrangements or life status.&lt;p&gt;For the majority of people who file using 1040-EZ, you&amp;#x27;re basically just confirming what the IRS already knows from its own data collection along with some possible adjustments. It would be possible for the IRS to collect even more information, but that does seem rather intrusive and unwelcome to most American&amp;#x27;s sensibilities.</text></item><item><author>thot_experiment</author><text>There&amp;#x27;s no reason the government couldn&amp;#x27;t just tell me how much money they took each year and give me a chance to contest it if I thought it was wrong.&lt;p&gt;One of my best friends lives in Tokyo and every time I have to think about taxes I get this little pang of jealousy at how sane and un-infested with rent seeking trashcans (intuit etc.) the Japanese system seems.&lt;p&gt;If you need the government to behave against the best interest of the people in order for your industry to exist maybe your industry shouldn&amp;#x27;t exist.</text></item></parent_chain><comment><author>jjav</author><text>&amp;gt; Which bunch of shares did you sell? Was it a short term gain or a long term gain? Was it a loss? It depends. Neither your broker or IRS knows the answer, but you do.&lt;p&gt;Your broker does know because you need to tell them which ones to sell when you sold.&lt;p&gt;The IRS also knows because that&amp;#x27;s included in the cost basis reported to them by the broker. (This changed some number of years ago, brokers used to only report the income from the sale but not the cost.)&lt;p&gt;&lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;www.spencerlawfirm.com&amp;#x2F;2011&amp;#x2F;01&amp;#x2F;new-cost-basis-reporting-rules-effective-january-1-2011&amp;#x2F;&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;www.spencerlawfirm.com&amp;#x2F;2011&amp;#x2F;01&amp;#x2F;new-cost-basis-report...&lt;/a&gt;</text></comment>
<story><title>IRS will look into setting up a free e-filing system</title><url>https://www.washingtonpost.com/us-policy/2022/09/07/irs-free-efile-biden/</url></story><parent_chain><item><author>ryandrake</author><text>&amp;gt; A lot of asset sales should be or are reported by financial institutions, so in the case of me selling stock through Schwab or whatever, it should still be handle-able by the IRS.&lt;p&gt;Your financial institution doesn&amp;#x27;t necessarily know your capital gains. It reports stock sales to the IRS, but often doesn&amp;#x27;t report the cost basis because it doesn&amp;#x27;t know. Consider:&lt;p&gt;You buy 50 shares of ABC on Jan 1 2020. Then you buy 50 more shares on Jan 1 2022. Now you sell 50 shares of ABC on Jul 1 2022. Which bunch of shares did you sell? Was it a short term gain or a long term gain? Was it a loss? It depends. Neither your broker or IRS knows the answer, but you do.&lt;p&gt;EDIT: The above information is evidently out of date by about 10 years. TIL</text></item><item><author>TulliusCicero</author><text>&amp;gt; The challenge is that you personally need to report additional information for things like capital gains tax on asset sales, any credits&amp;#x2F;deductions you wish to claim, and changes in your living arrangements or life status.&lt;p&gt;Two things:&lt;p&gt;1. A lot of asset sales should be or are reported by financial institutions, so in the case of me selling stock through Schwab or whatever, it should still be handle-able by the IRS.&lt;p&gt;2. Okay yes, it&amp;#x27;s reasonable for me to put in my living status changes or tax deductions I want to claim, but they don&amp;#x27;t ask &lt;i&gt;just&lt;/i&gt; for that, they ask for all the other shit too, all the stuff they already know the answer to. Why?</text></item><item><author>BitwiseFool</author><text>&amp;gt;&amp;quot;There&amp;#x27;s no reason the government couldn&amp;#x27;t just tell me how much money they took each year and give me a chance to contest it if I thought it was wrong.&amp;quot;&lt;p&gt;Behind the scenes, the IRS already has a well informed idea of how much you owe, based on the information submitted to them by your employer and a few select third parties - such as your bank or broker. The challenge is that you personally need to report additional information for things like capital gains tax on asset sales, any credits&amp;#x2F;deductions you wish to claim, and changes in your living arrangements or life status.&lt;p&gt;For the majority of people who file using 1040-EZ, you&amp;#x27;re basically just confirming what the IRS already knows from its own data collection along with some possible adjustments. It would be possible for the IRS to collect even more information, but that does seem rather intrusive and unwelcome to most American&amp;#x27;s sensibilities.</text></item><item><author>thot_experiment</author><text>There&amp;#x27;s no reason the government couldn&amp;#x27;t just tell me how much money they took each year and give me a chance to contest it if I thought it was wrong.&lt;p&gt;One of my best friends lives in Tokyo and every time I have to think about taxes I get this little pang of jealousy at how sane and un-infested with rent seeking trashcans (intuit etc.) the Japanese system seems.&lt;p&gt;If you need the government to behave against the best interest of the people in order for your industry to exist maybe your industry shouldn&amp;#x27;t exist.</text></item></parent_chain><comment><author>toast0</author><text>I&amp;#x27;ve only been trading stocks since 2005ish, but all the brokers I&amp;#x27;ve dealt with have had ways to tell them which shares I was selling. And if I didn&amp;#x27;t pick them, they&amp;#x27;d pick for me. Nowadays, they&amp;#x27;re required to track cost basis for regular shares. Even if you have shares where they won&amp;#x27;t report a cost basis, you&amp;#x27;re supposed to tell them which shares you&amp;#x27;re selling before the transaction settles.&lt;p&gt;Employment compensation related shares get weird, but they will at least track the purchase date or the date it entered their system anyway.</text></comment>