BUYING STOCKS ONLINE AND PAYING TAXES
Will you owe taxes on the money you make by buying stocks? Taxes are everywhere in this world and it is no different when you start investing in the stock market. Whether you win or lose, have gains or losses, make money or lose money in stocks, there are always tax consequences. Online investing is no different than any kind of investing: you owe taxes on everything.
When you learn how to buy stocks for beginners you must also learn about how to pay taxes for beginners. Any time you buy stock online, it will have some tax implication regardless of whether you have capital gains or losses. How can this be, you ask?
Your online stock broker is required by law to turn over a record of all your sales to the IRS. At the end of each year then, the IRS will know how much stock you sold and what amount you received for it. In your tax returns, you will then have to show how much you gained or lost for each stock.
At the end of the year in January, your online stock broker will send you your tax reporting information which they also supplied to the IRS. It is your responsibility to then list each stock you sold along with when you sold it, when you bought it, what you bought it for, and what you sold it for. You will then have either a capital gain or loss for the year.
Stock market beginners may have trouble doing all of this because taxes are never easy. You may also likely owe quarterly taxes if you have stock gains which means you have to send your taxes in every quarter for the gains you have. If you are wondering “how much in taxes do I owe for my stocks?” it is best to hire a tax preparer or do extensive research online.
This US government is a very unfair body of law that is made up by greedy and job preserving politicians. These lawmakers have deemed that any one person is only allowed to deduct $3000 in stock losses per calandar year. This means, if you have $10,000 in stock losses one year, you can only deduct $3000 in that year and must carry over the rest till the next year. The next year you will only be able to declare another $3000 and so on.
The $3000 in stock losses is one of the most unfair and rediculous laws we have and the dishonest lawmakers in Washington DC can only get away with it because it doesn’t affect too many people. One thing you should know: if you have enough money to be even THINKING about buying stocks for the the first time, YOU ARE RICH according to the politicians in Washington.
Once you start buying stocks for the first time online, you will have to keep track of your buys and sells. Most online brokers are good at having everying on their sites for you to look at and will send you a year end tax summary. However, just to be safe it is always a good idea to keep your own stock tax records. Remember, the IRS doesn’t care whether you are a stock beginner or veteran: they just want their money and by law you have to give it to them.
