With stocks, your broker just sends you a 1099 at the end of the year. It includes the cost basis of all the stock you sold that year and the date of purchase.

With stocks, your broker just sends you a 1099 at the end of the year. It includes the cost basis of all the stock you sold that year and the date of purchase. If you sell a lot of stocks, you just get it as a CSV file and stick it into your tax software. This means paying for tax software, and probably a "higher-tier" version of it, but it's not much work. The 401k works differently, as you noted. The money goes in pre-tax and then you pay income tax when you take it out. It's basically a way to defer your income, let it grow in the stock market, and pay taxes later. Roth IRA is a little similar--you pay income taxes before you put the money in, you let it grow, but you can take the money out tax-free (subject to conditions).