Robinhood’s Surge Complicates Tax Season for Couch Traders

Novice stock market traders who won big on market highs in 2020 will have to confess their gains to the IRS in the next few months.

With filing season opening Friday, so-called retail traders will face scores of detailed form pages and certifications that they withheld enough taxes on any gains and obeyed the rules professional traders follow. Tax professionals have been preparing all year for the wave of retail traders likely to need help this tax season from trades made by popular commission-free apps like Robinhood.

There’s reason to believe many retail traders will need extra help this ...