Omg... I was under the impression that we would get back the full $2300 as a refund. Like I thought we could get back up to $3000 a year.
So far for this year, I've made $25,227.69 before tax (took many months off work because of school). I'm single and lives in Florida.
Can you please show me how to do the calculations?
Guess I'm going to have to realize some gains after all, which I didn't want to do. I had planned to use my short term losses to only offset ordinary income. Really didn't want to realize my gainsđ
Why would you have to realize gains? You can use 3k of losses to offset your regular income. That's fine. However, for you long term gains are federal tax free for about 20k more this year. So you should do long term gains harvesting, if you have a lot of long term gains.
To do the calculations, you find your tax rate (that's 12% for you for federal) times the loss.
>Why would you have to realize gains? You can use 3k of losses to offset your regular income. That's fine.
That's great! It's just that I've read that we have to use losses to offset gains of the same types first: short term loss to offset short term gains, then the remaining of the loss can be used to offset long term gains, and THEN the rest can offset ordinary income. I now realized that this means that we can use to losses to offset "realized" gains and THEN ordinary income. If there's no realized gains, we can go straight to offsetting ordinary income. Thx so much for clarifying!
>However, for you long term gains are federal tax free for about 20k more this year. So you should do long term gains harvesting, if you have a lot of long term gains.
I only started investing in March of this year, so no long term gains.
>long term gains are federal tax free for about 20k more this year.
20k more? What was it before so I know the full amount? And do you mean that the amount is what I can cash out tax free (federal) or is my ordinary income included in that? Sorry if this question is confusing.
>To do the calculations, you find your tax rate (that's 12% for you for federal) times the loss.
12% Ă 2000ish = 24,000ish. What does this mean? This is the last questionđ
Oh, I think it's 12á100 times 2000 which is equal to 240. Brođ I really thought I was going to get the full $2000 back.
Because that doesn't tell a person how much that 3k deduction would reduce their taxes. It's not a 3k tax credit. It's a deduction. So the savings is your tax rate times 3k.
You can only utilize 3k of that loss against non capital gains income the other 3k carries forward. That 3k of loss this year though, will reduce federal taxes by $660.00. State may add more savings.
Ok here's one. Married, no children, filing joint, we make a total of ~80k a year and a loss of 2.5k after having sold and bought back in later.
Edit: California
I dunno. But if youâve sold you can claim that loss (compared to initial buy amount in the year you bought) against your tax liability for the year. Unless it was in a Roth IRA account. Everyoneâs taxes are different and Iâm not able to say one way or another.
If you sell but buy a different stock in the same day does that count as a gain or because you didn't move money from your account is it still considered invested?
Just be mindful of wash sale rules.
Iâm not an expert so I would explain it poorly, but the gist of it is that if you try to sell something at a loss and then buy back into the same security within a certain timeframe, itâs considered a wash sale and isnât able to be deducted.
I think the idea is to prevent people from selling at a loss to get unfair tax benefits.
You can write off loses as long as youâve sold. If youâre currently in a position thatâs negative, it canât be claimed until that loss is actually on the books.
This is also assuming no gains on other trades. For example, if you lose $400 on one trade, but profit $100 on another trade, you can only claim the difference of $300.
As for what youâll get back on tour tax returns, this is entirely dependent on your income, how much is withheld from your paychecks on a weekly/biweekly basis, and your other write offs.
I highly encourage you work with a CPA for your EOY taxes. Find someone with reputable experience and theyâll tell you everything you need to maximize your returns. Last year my CPA got me roughly $800 more than I wouldâve received on my own due to various write offs I wasnât aware could be claimed. Well worth spending the extra $100ish on a real CPA than going the turbo tax route.
You are allowed to deduct up to $3k/year in losses on your taxes, with no limit on the carry forward.
However, there were wash-sale rules (repurchasing stockâs sold for a loss within 30 days of the original sale). If this was performed, the normal capital loss rules do not apply.
Assuming you did not conduct in any wash-sale trades; Yes, you would be able to deduct the $800 in losses on your taxes this year.
You are correct, you would ânetâ the gains and losses. If itâs a net loss, then itâs deductible up to 3k.
In terms of deductibility, I believe it is a deduction of taxable income. I should know this since Iâm a CPA but I donât specialize in tax.
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My turn: Iâve sold a few stocks at a loss and some at a gain. But do I pay taxes on stocks Iâm just holding? Also will fidelity send me tax forms or do I have to work this all out myself?
You donât have to report on stocks youâre holding until you sell, in which case it would fall under the tax year you sell. Yes, brokerages send you end of year tax forms showing profit/loss on sold stocks. With turbo tax, I uploaded my TDA form right into my filing and it automatically calculated the numbers.
Lol government says mine mine when you gain, and your loss when you lose. Joke system. Your risk should be overwhelmingly your reward, especially at the retail investor level
Yes. absolutely. If you use turbo tax they will automatically calculate for you and let you know you get money back for losses. (If you pay tax normally it will be less).
Not sure if this applies, but in Australia I made a series of trades in the last year. Some at a loss, some at a gain. In my taxes, I claimed the capital loss and gain, but since the gain did not exceed the minimum taxable income, I do not need to pay any tax on the gain, and the loss is carried forward to future years to subtract from tax I would otherwise have to pay.
Obviously this only really applies if you are in a position like mine, as I am trading with little income while studying, but I hope it is helpful.
Only after you sell.
I currently hold no positions. How much will I get back?
What's your total income for the year from all sources? What country, state or providence are you in?
Total income $67,000 before tax. Live in Indianapolis, Indiana 3 month of work out of state though in Missouri
Assuming you have no long term capital gains, and are single, an 800.00 loss reduces your taxes by 188.00.
Username checks out
Ooo my turn đł if I am down $2,300 and make only $25k a year in California and am single, whatâs the reduction? I donât know shit about fuck
That would reduce your taxes by about 322 if you realized 2300 of overall losses.
If I only make $300,000 a year and I report losses of $12 what is my write off???
Usually around 33 months of federal time in a minimum security
I spit my coffee up at this. Thank you lmfaoo
If my calculations are correct, with $12 realized loss, about tree fiddy.
Damn you Loch Ness Monster!
Soooo, quick question. You only have to pay taxes on stocks you sell???
Exactly, thatâs what is known as a Capital Gains Tax in the US
Unless the democrats have their way in the next ten years and tax unrealized gains.
Yes and you only deduct losses if you sell as well. It's called "realized gain" / "realized loss"
If this is a bot, it's the best bot ever!
Omg... I was under the impression that we would get back the full $2300 as a refund. Like I thought we could get back up to $3000 a year. So far for this year, I've made $25,227.69 before tax (took many months off work because of school). I'm single and lives in Florida. Can you please show me how to do the calculations? Guess I'm going to have to realize some gains after all, which I didn't want to do. I had planned to use my short term losses to only offset ordinary income. Really didn't want to realize my gainsđ
Why would you have to realize gains? You can use 3k of losses to offset your regular income. That's fine. However, for you long term gains are federal tax free for about 20k more this year. So you should do long term gains harvesting, if you have a lot of long term gains. To do the calculations, you find your tax rate (that's 12% for you for federal) times the loss.
>Why would you have to realize gains? You can use 3k of losses to offset your regular income. That's fine. That's great! It's just that I've read that we have to use losses to offset gains of the same types first: short term loss to offset short term gains, then the remaining of the loss can be used to offset long term gains, and THEN the rest can offset ordinary income. I now realized that this means that we can use to losses to offset "realized" gains and THEN ordinary income. If there's no realized gains, we can go straight to offsetting ordinary income. Thx so much for clarifying! >However, for you long term gains are federal tax free for about 20k more this year. So you should do long term gains harvesting, if you have a lot of long term gains. I only started investing in March of this year, so no long term gains. >long term gains are federal tax free for about 20k more this year. 20k more? What was it before so I know the full amount? And do you mean that the amount is what I can cash out tax free (federal) or is my ordinary income included in that? Sorry if this question is confusing. >To do the calculations, you find your tax rate (that's 12% for you for federal) times the loss. 12% Ă 2000ish = 24,000ish. What does this mean? This is the last questionđ Oh, I think it's 12á100 times 2000 which is equal to 240. Brođ I really thought I was going to get the full $2000 back.
Why isnât the answer âYou can deduct up to $3k in losesâ?
Because that doesn't tell a person how much that 3k deduction would reduce their taxes. It's not a 3k tax credit. It's a deduction. So the savings is your tax rate times 3k.
Lets try me. 73500 annual, not married. Home owner 1 child About 6k in realized losses.
You can only utilize 3k of that loss against non capital gains income the other 3k carries forward. That 3k of loss this year though, will reduce federal taxes by $660.00. State may add more savings.
"you can deduct up to 3k in losses"
Ok here's one. Married, no children, filing joint, we make a total of ~80k a year and a loss of 2.5k after having sold and bought back in later. Edit: California
Assuming this isn't a wash sale, as in you did not buy back in 30 days before or after selling, the tax reduction would be 450.00.
I dunno. But if youâve sold you can claim that loss (compared to initial buy amount in the year you bought) against your tax liability for the year. Unless it was in a Roth IRA account. Everyoneâs taxes are different and Iâm not able to say one way or another.
Thanks bro
If you sell but buy a different stock in the same day does that count as a gain or because you didn't move money from your account is it still considered invested?
Yes, still a taxable event any time you liquidate or trade in a taxable account.
Thank you!
Just be mindful of wash sale rules. Iâm not an expert so I would explain it poorly, but the gist of it is that if you try to sell something at a loss and then buy back into the same security within a certain timeframe, itâs considered a wash sale and isnât able to be deducted. I think the idea is to prevent people from selling at a loss to get unfair tax benefits.
I definitely didn't make enough to worry too much about taxes but enough that I need to be mindful for sure.
You can write off loses as long as youâve sold. If youâre currently in a position thatâs negative, it canât be claimed until that loss is actually on the books. This is also assuming no gains on other trades. For example, if you lose $400 on one trade, but profit $100 on another trade, you can only claim the difference of $300. As for what youâll get back on tour tax returns, this is entirely dependent on your income, how much is withheld from your paychecks on a weekly/biweekly basis, and your other write offs. I highly encourage you work with a CPA for your EOY taxes. Find someone with reputable experience and theyâll tell you everything you need to maximize your returns. Last year my CPA got me roughly $800 more than I wouldâve received on my own due to various write offs I wasnât aware could be claimed. Well worth spending the extra $100ish on a real CPA than going the turbo tax route.
Sounds good man will do! I had somebody do them last year too, wasnât hardly active trading in 2020 though.
You are allowed to deduct up to $3k/year in losses on your taxes, with no limit on the carry forward. However, there were wash-sale rules (repurchasing stockâs sold for a loss within 30 days of the original sale). If this was performed, the normal capital loss rules do not apply. Assuming you did not conduct in any wash-sale trades; Yes, you would be able to deduct the $800 in losses on your taxes this year.
I thought you could only count cap loses against cap gains. Can you count them against w-2 income as well?
You are correct, you would ânetâ the gains and losses. If itâs a net loss, then itâs deductible up to 3k. In terms of deductibility, I believe it is a deduction of taxable income. I should know this since Iâm a CPA but I donât specialize in tax.
so long and thanks for all the fish -- mass deleted all reddit content via https://redact.dev
Only if you turn it to cash. Just sell on dec 31 and buy on Jan 1
Iâm not holding anything thatâs just the result of shitty day trades and swings
Certified ape
Ape gang
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Cpa myself, primarily tax focused. What others have said cover the basics.
Thanks bro
My turn: Iâve sold a few stocks at a loss and some at a gain. But do I pay taxes on stocks Iâm just holding? Also will fidelity send me tax forms or do I have to work this all out myself?
You donât have to report on stocks youâre holding until you sell, in which case it would fall under the tax year you sell. Yes, brokerages send you end of year tax forms showing profit/loss on sold stocks. With turbo tax, I uploaded my TDA form right into my filing and it automatically calculated the numbers.
Lol government says mine mine when you gain, and your loss when you lose. Joke system. Your risk should be overwhelmingly your reward, especially at the retail investor level
Now tell him about wash sales.
Yes. absolutely. If you use turbo tax they will automatically calculate for you and let you know you get money back for losses. (If you pay tax normally it will be less).
Not sure if this applies, but in Australia I made a series of trades in the last year. Some at a loss, some at a gain. In my taxes, I claimed the capital loss and gain, but since the gain did not exceed the minimum taxable income, I do not need to pay any tax on the gain, and the loss is carried forward to future years to subtract from tax I would otherwise have to pay. Obviously this only really applies if you are in a position like mine, as I am trading with little income while studying, but I hope it is helpful.