TaxBit's "Lock Accounting Period" feature allows you to lock your tax forms in place so that any changes to the data will not make those numbers move.
- When you download an 8949 you will be asked if you want to lock accounting. Doing so will freeze your 8949 in its current form.
- When you lock accounting for one year, all prior years will be locked as well. (Ex: When you lock 2020, 2019 and earlier will be locked by default.)
- You can unlock a year after it’s been locked, but when you do so, you will be prompted to accept that your results may shift around. Once an account has been unlocked, there will be no way to restore the previous version.
- Once an accounting year is locked and you locate data that wasn’t available before, you can still add that in - in fact, we recommend that you do! If that cost basis has an impact on a future year, it will be accounted for.
When you have locked your accounting period, any transactions that were included in the year you locked and any prior years will show a small lock symbol when you click on it. This means that you will not be able to edit or delete that transaction.
Editing and deleting transactions has the potential to change your forms. If you have "locked" your form in its current state, we don't want to be able to do that. If any transactions do not have the little lock symbol, then that means it was added after your accounting period was locked.
Lock Accounting will lock entire tax years, including gains/losses on your 8949, your total income on your Income Report, and the accounting method which was used to calculate the forms for that year. At this time, TaxBit is recommending that users use the Specific ID - HIFO by Exchange accounting method as this provides cross platform tracking and the ability to use the Tax Optimizer! You can read more about accounting methods HERE.
- An important note: If you have used FIFO or HIFO Universal in the past, but you want to change to HIFO by Exchange after all of your data is added to TaxBit, you can lock your past years on whichever method you used to ensure that there are no discrepancies/duplications in your cost basis for new forms!
All "unlocked" data will roll over into the new unlocked year and be used in calculations based on the accounting method you have set for that year.
What are the benefits of choosing to lock your accounting period?
Once you download and lock your accounting period, you can be sure that the form you provide to the IRS that day will be the same as the one downloaded any day after (as long as you keep it locked). So there will be no conflicting data that you are providing to the IRS or keeping for your personal records.