Combined with Schedule D Automation Tool, GainsKeeper Now Offers Even More Ways to Take Complexity Out of Investments at Tax Time
(RIVERWOODS, ILL., February 12, 2004) – While the reduction in the tax rates for qualified dividends is a welcome outcome of the 2003 Tax Relief Act, many investors are just now grappling with how to calculate and report qualified dividends on their 2003 income tax returns. To help these investors, GainsKeeper (www.gainskeeper.com) has introduced DivTracker, an easy-to-use web-based tool that enables investors to quickly identify dividends that can take advantage of the lower qualified dividend rates and provides the figures taxpayers need to speed completion of their IRS Form 1040. GainsKeeper is the automated tax lot service from CCH INCORPORATED (CCH), a leading provider of securities information and software and a Wolters Kluwer company.
“The ordinary and qualified dividend figures that most brokerage firms provide only show whether or not the security itself has qualified dividends. Just because a security has qualified dividends does not mean each shareholder can claim the qualified dividend and take advantage of the lower tax rates, rather it’s up to each individual to determine whether or not they are entitled to the qualified dividend and report this appropriately on their tax returns,” said Peggy Hayner, market manager for CCH’s investment management group. “Determining whether or not you qualify can be a monumental undertaking, which is why DivTracker is the right tool at the right time to help investors quickly determine their qualified dividend holdings.”
Under the 2003 Tax Relief Act, qualified dividends are taxed at the lower 5- percent or 15-percent tax rates, instead of at the taxpayer’s ordinary income tax rate, which could be as high as 35 percent. As a result, identifying qualified dividends and correctly reporting them on their tax return can mean a significant savings for investors.
Using DivTracker, taxpayers simply log on, record the symbol and number of shares of dividend-paying stocks they bought or sold and when they did so during the year. DivTracker determines the IRS holding period qualification, which requires that the dividend paying stock was owned for more than 60 days of the 120-day period that begins 60 days before the ex-dividend date.
DivTracker then makes the appropriate calculations and produces a Qualified Dividend Report. The report displays the taxpayer’s “Ordinary Dividend” and “Qualified Dividend” income classifications, which are required for tax filing in line 9a and 9b of IRS form 1040.
Hayner notes that there are a number of dividend paying stocks that do not qualify for the reduced tax rates due to other IRS restrictions, for example, REITs. DivTracker does not make any qualification or exclusion based on these IRS restrictions; it is the tax filer’s responsibility to make this type of non-holding period qualification determination.
GainsKeeper’s Schedule D
In addition to changes lowering the tax rate on qualified dividends, the Tax Relief Act of 2003 also lowered the tax rates for long-term capital gains. The GainsTracker portion of GainsKeeper automates the complicated calculations required to capture capital gains and losses – including cost basis adjustments from wash sales and corporate actions, such as stock splits, mergers and spin-offs. The service calculates both pre- and post-May 5 gains and losses, adds in prior year loss carryover figures and then populates the actual IRS Schedule D.
“Last year’s tax law changes are a benefit to investors, but only if they know how to accurately identify and report their investment results to the IRS,” said Hayner. “GainsKeeper is focused on developing the decision support tools and resources investors, brokerage firms and financial planners need to ensure the tax-efficiency of their portfolios.”
Pricing and Availability
DivTracker is available to GainsKeeper customers for $9 for a six-month subscription (covering the 2003 tax filing) or as a stand-alone tool at www.DivTracker.comfor $19.
GainsKeeper is the leading provider of automated tax-based financial tools and services for the investment community, and is a division of CCH INCORPORATED.
Individual investors and professionals seeking cutting-edge investment tools can access GainsKeeper directly at www.gainskeeper.com. GainsKeeper Institutional Services (GKIS) provides sophisticated, cost-efficient ASP and in-house tax lot accounting solutions to the brokerage, mutual fund and fund administration industries. More information is available at www.GKIS.net, via e-mail to email@example.com, or by calling 617-472-3314.
About CCH INCORPORATED
CCH INCORPORATED, headquartered in Riverwoods, Ill., was founded in 1913 and has served four generations of business professionals and their clients. CCH is a Wolters Kluwer company. The CCH web site can be accessed at cch.com. The CCH Business and Finance Group web site can be accessed at business.cch.com.