How do I pay taxes when selling securities?

Question

Let's say I buy 100 shares at 10/share. The stock goes up 1 point so I sell to make a $100 profit. Do I get taxed when I sell the shares? If not, how do I know how much I should deduct from my earnings for tax?
I am just getting started with trading online, so any help will be greatly appreciated!

Answer 1

Yes, you report the sale on your taxes for the year you sell it, whether you have a gain or a loss. You fill in the information on a Schedule D, and follow the instructions to determine your tax due if any.

In your example, unless you paid NO fees either on the sale or on the purchase which would be highly unusual, your gain would be less than $100, by the amount of the fees.

If you have several sales in a year, the losses can wipe out the tax liability on some of the gains.

Answer 2

Such a profit would be a capital gain and whether it is taxed and at what rate will depend on you jurisdiction. Capital gains if taxed at taxed at a different rate if at all. Check with the income tax department of a local accountant about taxability. The amount you set aside for tax will depend on the tax rate you have or will need to pay.

Answer 3

specific, you pay earnings tax on the revenue you're making. No, an LLC, etc would not benefit you, that is nonetheless a sole proprietorship. You get the resale certificates out of your state. It ability you do no longer pay revenues tax.

Answer 4

Don't forget you pay commissions on both sides of the transaction.....$100 will evapourate fast.

re taxes: you must keep records and report earnings at tax time. (and / or losses)