i'm an 18 year old teen living in america who is about to start trading. i've done several jobs in the past years and saved up 10,000 dollars. i have no other ways of income and i just quit my job and mcdonalds. if i trade stocks, how much tax will the government take? also is the tax charged on the total amount you make or on the profit. by this i mean let's say you buy company XYZ for a 1,000 dollars and sell it and make 1,100 dollars. is the tax going to be charged on the 100 dollar profit i made or the total 1,100?
2007-10-04 12:50:16 · 4 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United States
people: read carefully, i don't have an ordinary income!!!!!!!!!!!!!! i don't have a job to begin with.
2007-10-05 09:02:32 · update #1
response to all answers:
so you pay taxes on stocks depending on the state you live? the state income tax?
2007-10-05 12:39:39 · update #2
You pay tax on the gain from the sale of the stocks. If you hold stocks for less than a year, it is short term gain, which is taxed at your ordinary income.
2007-10-04 13:04:54 · answer #1 · answered by MukatA 6 · 0⤊ 0⤋
You'll only pay tax on the gain - in your example, $100.
Federal tax rate will be 0, 5% or 15% depending on your total income.
State income tax will depend on where you live.
2007-10-04 19:55:01 · answer #2 · answered by Judy 7 · 0⤊ 0⤋
You will pay tax on only on the profit .It will vary how much you'll have to pay.It depends on your total income and also on whether it is a short or a long term gain.
2007-10-04 20:01:36 · answer #3 · answered by marekny7 2 · 0⤊ 0⤋
People did read carefully. You said you just quit your job. That is the other income they are talking about.
2007-10-05 17:09:35 · answer #4 · answered by CarVolunteer 6 · 0⤊ 0⤋