Stocks & Taxes?

I'm 25 years old, and I have a sudden interest in investing. I am finally in a good financial situation and can invest. HOWEVER, I'm a bit nervous about investing. What makes me nervous about investing is about taxes.

I know that you have to report your gains or losses on taxes... but how exactly does that work? And... with stocks can you end up owing the government money if you lose a lot in the market?


What Girls Said 0

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What Guys Said 2

  • Only when you sell do you pay taxes on the capital gains. Short term if you bought & sold less then a year & long term capital gains if held over a year.
    If you have a loss you can offset your gains with losses. If you have $6,000 in long-term capital gains and $2,000 in capital losses, you can subtract that $2,000 and only be taxed on $4,000. Schedule D (Form 1040), Capital Gains and Losses.
    Most tax software should have these forns.

  • Invest with a group based in a nation with no capital gains tax. No tax, no problem.