My only income is $717.00 a month from social security disability due to my being very ill...luckily I have paid off my house and cars before finding out I am sick. ..I do not have to file federal income tax due to my income is to low combined with the source of my income is soc sec disability... I now would like to trade stocks..but only maybe 4 trades per month (buying and then selling)..so this would be like 48 trades a year..now to my question I need help with..lets say over a year I made $15k and I now need to file federal income tax I imagine?...how would I list my trades and how do I keep track of each buy and then sell?..Do I need to list each buy and sell on the federal tax form? Any advice will be greatly appreciated. Thank you.
You'll get different answers to this question even from the IRS. To be on the safe side, it's best to individually list each trade. Really not a big deal for the number of trades you're looking at doing. Trades are recorded on Schedule D of form 1040. I'm not sure, but I think that you must file the regular 1040 (not the 1040EZ). Good luck with your trading.
Strong advice... not even meaning to be rude or anything: Focus on actually making money, before worrying about paying taxes on it. No need to be planning on making 15k before it's done, and I'm serious about that. The taxes stuff, others can help.
I appreciate that but the reason I am asking about taxes first is I wanted to know if each trade needs to be filed with a federal tax return..for example if someone made $20k do they have to file or is it only for those who make over $20k? ( I hope I am explaining myself ok) Since I don't need to file a tax return now, I wanted to ask how trading gets filed...I realize there are capital gains and losses but I didn't know if there is like a minimum before you need to report it...I guess all of it has to be reported .. Thanks
Make a simple Excel or Micrsoft Works spread sheet with columns that mirror the columns of a schedule D. Then total them at year end. This way at year end you have all of your transactions neatly on a page ready to file. Mowery is still a teenager so his advice was meant with good intent but perhaps not well thought out. Concentrate on both making money and keeping track of it afterwards. surdo PS: You have to file a schedule D even if you lose money.
How then do the traders who I read here who say they trade like millions of shares keep track of each and every trade and how do they report it on their tax return? It must not be easy to keep track of each day when making 30 or some round trip trades..or is it easy to?
Most of those guys trade prop and get a K-1 which just tells the IRS what your net income was. When you are a retail trader then you have to send your actual statements along with any electronic record keeping.