Is having an account with two different brokerages bad? Will it make taxes harder?

Having accounts with two different brokerages is not inherently bad, but it can introduce additional complexity that may make tax season more challenging. Here's a breakdown of the considerations:

1. Tax Reporting Complexity: When you trade on multiple platforms, you may need to file separate 1099 forms with each brokerage and report the transactions on your tax return. This can lead to a more complicated tax-filing experience, especially if you have to deal with disallowed wash sales across both brokerages.
2. TurboTax or Equivalent: To mitigate the tax reporting complexity, you can use tax software like TurboTax, which can help you consolidate your information from multiple brokerages into a single tax return. However, it's important to upload all relevant 1099 forms and ensure that the software accurately captures all your transactions, including any disallowed wash sales.
3. Overall Tax Strategy: If you have a strategy to take advantage of tax-advantaged investments or deductions, having multiple brokerages might complicate this. For instance, if you're contributing to tax-advantaged retirement accounts like a 401(k) or IRA, you'll need to ensure that the investments you make in taxable accounts don't disrupt these strategies.
4. Security and Password Management: Managing multiple brokerages also means dealing with more passwords and security measures, which can be a hassle and increase the risk of security breaches.
5. Investment Diversification vs. Complexity: While having multiple brokerages can diversify your investments and potentially offer better services or fees, it also increases the need for management and can lead to a more complex investment portfolio. This can be particularly challenging for investors who are not experienced with managing multiple accounts.

In conclusion, having two brokerages is not necessarily bad, but it does add complexity to your financial management, including tax reporting. It's important to weigh the benefits of diversification and potential service advantages against the added administrative burden. If you choose to proceed, ensure you have a solid tax strategy in place and the necessary tools to manage your investments and taxes effectively.