02-09-2005, 05:03 PM #1
DOing taxes on STOCK sales/capital gains...HOW???
Ameritrade sent me my w-90, or i think thats what it said...anyway, i have bought/sold many stocks since last year....how do i do these taxes? can i take it to H&R block? someone please help me...thanks in advance
02-09-2005, 05:12 PM #2
bro goto www.irs.gov and click the link for taxes. HR&R block will do it for you free and E-file it as well they ask you questions etc and you just put in the #'s. I'll find the link and post it for ya bro.
02-09-2005, 05:14 PM #3
02-09-2005, 05:15 PM #4
click the I agree to exit the site button then select the basic free file service it will guide you through it let you put in your bank aco**** etc and you will have youre return in 15 days in your account automatically deposited.
02-09-2005, 07:19 PM #5
I hope you kept good records of what you bought and sold. Otherwise, it'll be like 21 year old snatch -- hairy.
If you bought, say, 100 shares of ABC corporation at $10 each in January, you spent $1000 total. If you sold all 100 shares in February for $20 each, you received $2000 total. You then subtract your cost from your net profit, and you have to pay taxes on $1000. (Well, you can deduct whatever charges your broker stuck you with, but we'll keep this simple).
Now, if you took that $2000 and bought 100 shares of XYZ corporation at $20 a share in March, and then sold it for $10 a share in April, then you lost a total of $1000, so you would deduct that loss from your net gains, and you'd be liable for taxes on $000.
Even if it's zero, you still have to file the forms to report your activity (I think, anyway).
Now . . . say you bought 100 shares of ABC at $10 in January, your net cost would be $1000.
If you sold 50 shares of ABC in February for $20, your profit from their sale would be $500. You would report income of $500.
Now, let's say you took that $500 and bought 10 more shares of ABC in March for $50 a share.
Your total cost for your shares is $1000, and your total income for the year is $500.
In April, you decide to sell 5 shares of the ABC stock you purchased in January (at $10 a share) in April for $500 ($100 a share). You paid $10 a share for it, sold it at $100, so your net profit on this trade is $90/share x 5 = $450.
But -- If, in April, you decide to sell 5 shares of the ABC stock you purchased in March for $50 a share for $100, you end up with the same amount in your wallet, but -- your cost on those 5 shares was $50 x 5 = $250, and your selling price was $500, so you tell the IRS your income on those shares was only $250 instead of $450, and you pay less income tax.
So, ya, when you buy and sell stocks like that, you really really really need to keep excellent, detailed records. I hope you have 'em, or your broker can get 'em for ya. Otherwise, you're probably gonna end up paying a lot more taxes than you should.
Good luck . . .
02-09-2005, 07:34 PM #6
02-09-2005, 07:36 PM #7
One other thing . . .
One of the advantages of investing in a mutual fund is that they keep track of all those stock trades for ya; figuring out what your annual + or - is is a lot easier . . .
02-09-2005, 07:38 PM #8Originally Posted by Tock
Sorry to highjack the thread but,
Do you need to worry about + or - gains with a roth or 401K?
02-09-2005, 08:04 PM #9Originally Posted by Jdawg50
If you make $50,000 income, you put $3000 in a 401k, you only have to pay income tax to the IRS for $47,000. That saves you 20-something % tax on that $3000, so you can spend it on wasteful and licentious living. Then when you retire, when you withdraw, say, $30,000 a year for living expenses, you pay income tax on the full $30,000. But all the stock profits are tax free for as long as you don't take anything out. Cool-o-rama.
If you make $50,000 income, you put $3000 in a Roth IRA, you still have to pay income tax on the full $50,000 BUT you don't pay any income tax on the money you take out after you reach the age of 59 1/2. And, like the 401k, the stock profits are not taxed as long as the $$$ stays in the account.
The difference is pretty much just when you pay taxes -- up front, or at the end. When the Roth first came out, people were saying it's a better deal than the 401k, but IMHO, I don't think there's much difference.
Plus, I would suspect that in another 30 or 50 years or so, if there's a lot of people taking tax-free money out of their Roth accounts, and if the government is desperate for $$$, then they're probably gonna figure out some way to tax the Roth money.
Who knows . . .
But for sure, before you invest in anything else, you want to max out your allowable contributions to either a Roth or 401k. It's tax-free deferred money, and that's the best deal in town.
02-09-2005, 08:07 PM #10
so bottom line is you do not pay taxes on the earnings from the roth, but when you take out earnings from the 401k you will? right?
02-09-2005, 08:38 PM #11Originally Posted by Jdawg50
Best long-term place to park your $$$, IMHO, especially if you don't intend to fuss with your investments and spend a lot of time keeping up with what's happening in the stock market and the economy in general, is the Vanguard 500 mutual fund. Its expenses are dirt cheap, and it's a good investment company. One of the few that didn't get dinged in the last mutual fund scandal. www.vanguard.com And index funds are the way to go, anyway.
02-10-2005, 10:25 AM #12
this sucks, in Canada they will charge you taxes after you earned more than 500 000k total lifetime.
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