question about taxes

Discussion in 'Taxes and Accounting' started by lasner, Nov 4, 2006.

  1. lasner

    lasner

    Hey I have a question for you guys if you make a nice chunck of change off of one trade are you taxed on your normal income or is the amount earned on the trade added to your income and then your taxed on that.

    So if I'm in the 25% tax bracket and I make 100k off of a trade Do I pay 25% on it or do do I pay the next bracket up which is something like 30%.
     
  2. If you are trading as a private individual then a short term capital gain gets entered on the front page of the 1040 tax form. The capital gain gets added to income from other sources to calculate adjusted gross income.

    Remember to check your state income tax return also. State tax returns vary a lot from state to state.

    In some states once income becomes greater than about $ 75,000 the taxpayer loses some or all of the tax deductions available to him / her. The tax deductions phase out at about $ 75,000 / year income.

    It might be a good idea for you to read through the year 2005 1040 tax book now and prepare yourself for filing next year.

    You might have to send a check to the IRS within three months of making the capital gain if the tax due is greater than 110 % of last year's tax.
     
  3. its also a really good idea to live in a state that doesn't have an income tax.

    i made a promise ot myself not to, and moved as soon as i could

    feds are bad enuf.
     
  4. Do you really want to live in one of those states? Nevada or Florida might be decent but certainly not Wyoming. To each is own.
     
  5. States with no income tax have to make their revenue somewhere... usually with very high property taxes and maybe sales taxes.
     
  6. I also have a question about taxes. I'm an Equity Trader, where can I find a good accountant to do my taxes?
     
  7. "States with no income tax have to make their revenue somewhere... usually with very high property taxes and maybe sales taxes"

    correct. and in the case of sales tax, i would much rather be penalized for CONSUMPTION than for income and capital generation

    if i work twice as hard to make $$$, i would prefer not to be penalized for it

    sales tax is infinitely superior to income tax.