Splitting capital gains taxes in a joint brokerage account when filing separately - help needed

If we split the capital gains 50/50, do we each get our own separate 1099-B from the brokerage, or do we just get one form with the total amount? Also, does MFS status affect the capital gains tax rate compared to filing jointly?

You'll typically receive just one 1099-B from the brokerage showing the total amount since it's a joint account. You'll need to manually split the transactions when reporting on your tax returns. Each of you should file a separate Schedule D and Form 8949 showing your portion of the gains. Regarding the capital gains tax rates, they're the same whether you file jointly or separately, but your overall income determines which capital gains tax bracket you fall into (0%, 15%, or 20%). Since filing separately often puts you in higher ordinary income tax brackets with lower thresholds, this could potentially push you into a higher capital gains bracket sooner than if you filed jointly. This is one reason why it's worth calculating your taxes both ways before committing to filing separately.

How does taxr.ai actually work? Do you just upload your docs and it gives you advice, or does it actually help fill out the tax forms? I'm trying to figure out if it's worth using for my situation.

I'm skeptical of using any service that isn't a major tax provider. Did you feel confident that their advice was accurate? I'm worried about using something I haven't heard of before for something as important as taxes.

You upload your tax documents (1099s, W-2s, etc.) and it analyzes them to find potential issues, deductions, or special situations that need attention. It doesn't fill out your forms, but gives you specific guidance you can apply when using your regular tax software. It's more like having a tax expert review everything before you file. I completely understand the skepticism - I felt the same way initially. What convinced me was that they provide specific tax code references for all their recommendations, and everything they advised matched what my friend (who's a CPA) told me, but with even more detail. I used their guidance alongside TurboTax and had zero issues. In fact, I found three deductions I would have missed otherwise.

How does this Claimyr thing actually work? Sounds too good to be true that they can somehow get you through faster than just calling yourself.

Yeah right. This sounds like BS. IRS phone system is designed to be impossible - how could some random service magically get through when millions of people can't? I'll believe it when I see it.

It doesn't get you through faster than the normal queue - it just waits in the queue for you so you don't have to stay on hold. They have an automated system that monitors the IRS hold music and when it detects that an agent is about to pick up, it calls your phone and connects you. You just go about your day instead of listening to that awful hold music for hours. I was skeptical too, but I was desperate after multiple failed attempts to get through. The way it works is pretty straightforward - their system just waits in line for you. I got connected to an IRS agent after about 3 hours, but I was able to do other things instead of being stuck on hold. When they called me, I spoke directly with the IRS agent and got my questions answered about capital gains reporting in a joint account. Nothing magical about it - just saves you the time and frustration of being on hold.

Would a simple spreadsheet work for tracking contributions, or do we need something more official? We've had this account for almost 7 years and I'm not sure we kept all the deposit records.

A spreadsheet is definitely a good start, but you'll want some backup documentation as well. Bank statements showing transfers to the brokerage account are ideal. If you don't have all records going back 7 years, gather what you can - even partial documentation is better than nothing. If you truly can't document the contribution percentages, the IRS will generally default to a 50/50 split for married couples. Just make sure both of you report the same split on your respective returns. If you're audited, you'll need to explain your methodology, so keep notes on how you determined the split.

I used TurboTax last year for this exact scenario. You basically enter the 1099-B information once, then it asks if the account is jointly owned. When you say yes, it lets you specify the percentage allocation. Just make sure you have the same allocation on both returns. Worked fine for me, but I did pay for the premier version since it had better investment support.

This is really helpful advice about tracking specific stock purchases to contributions! I never thought about matching the timing of contributions to actual stock purchases. Do you happen to remember what kind of documentation the IRS wanted to see during your audit? I'm wondering if brokerage statements showing the purchase dates and amounts would be sufficient, or if they wanted more detailed records like bank transfer confirmations too. Also, when you mention reinvested dividends - did you have to go back and calculate the proportional ownership of those based on the original contribution percentages, or did the IRS accept some other method? This is getting more complex than I initially thought, but I'd rather get it right from the start.