Ep 145: Tax Basics and Tips for Stock Market Traders & Investors

[@uSMELLSOGOOD]

Thank you so much! Finally a tax video that makes sense!

[@quantum7401]

Sasha always makes since. ;)

[@ericnastelin6610]

You should warn your listeners about the special taxes on commodity and volatility ETFs, which apply even in an IRA. For example, the gains on the gold ETF, GLD are subject to this tax, but the gains on the gold miners ETF, GDX are not. Also any options traded on these funds don't seem to be subject to these taxes. I learned this the hard way from my tax accountant.

[@northeastbirdsmore2281]

I'm obviously late finding this video but it's great and thoughtfully presented. The best part for me was your take on paying taxes. It took me a while to accept the heavy burden of taxes ( especially short term) cuz it can be demoralizing. However ..accepting that if your paying more taxes means you're making more $$$ then it's all good. A percentage of something is better then 100% of nothing.

[@junwen8713]

Like your say " Don't worry about taxes, the more taxes you pay means the more money you make"! That's the mentality we should all have.

[@domingolucas6651]

It is wise to prevent a heavy tax liability, and you're right: nobody should be paralyzed to earn more just because of having to pay more taxes.

[@TheToxicTank]

Great video Sasha! Most people won't get near this topic because it is so specific to each person. This was very well put together to get someone working in the right path to figuring out these issues. Side Note: I got hit with a wash sale even though I made money on the trade. This is because of the first in first out rule. I built a position over time and lowered my avg. I then sold for a profit and bought back in minutes later at a better entry price. While learning I inadvertently did this twice on the same ticker. I got hit with a wash sale even though I made profit because my first "batch" of shares were at higher value than the value I sold at even though overall average was lower. An important note that many will learn by accident. Closing out a trade on a profit does not always mean you won't hit a wash sale getting back into the same ticker. All at the same time this raised my positions cost basis from 2.07 a share to 2.30 a share. I am still wrapping my head around that part as I continue my education about this. Thought I would share. Thanks again for a great video and informational starting point.

[@sunrisegroup4912]

great stuff mr.evdakov.. thx for sharing and creating informative content, knowing tax structures is integral for current and potential traders.

[@ericnastelin6610]

Thanks for the great video! I do all of my trading in an IRA brokerage account. I assume that rules like 429 and 1256 don't apply in an IRA, and that there's no difference between long and short term gains. Am I right?

[@wwt17]

Great introductory video!!! XSP (1/10th the size of SPX) is considered 1256 as are futures contracts. With the advent of the micros, "regular" folk now have access to futures without having to worry about gigantic contract sizes.

[@brucehill334]

Thanks for your true honesty in teaching us, Sasha.

[@TT0ny_]

Keep up the great content and insight, no matter what people say (Y) Greetings from Switzerland

[@therewarder]

Thanks sooo much super great informative video. God bless you for helping others

[@tradersflyofficial]

You are more than welcome. Thank you so much for the kind words and for watching the videos

[@dba99985]

Thank for your info What about trading tolls that cost monthly? This also not deductible on taxes? And about the wash sale rule It's OK to trade same stocks within 30 days if i had gain from the same stocks? Basically its ok to trade same stocks until a lose and then waiting 30 days from closing postion?

[@navirosas5968]

Thank you for the knowledge, and for you time on educating us. 👍🏻

[@martiny458]

Thank you so much. Great information!!

[@tradersflyofficial]

You're more than welcome. Thank you so much for watching

[@martiny458]

@@tradersflyofficial you're welcome. And you got a new subscriber too 👍🏻👍🏻

[@jessesemmes8109]

Thank you for the info. I have been trying to learn to day trade using Robinhood because of the no commissions thing. Been doing it for about a year. But after watching this video I'm scared I've screwed a lot of things up. I've made hundreds of trades, sometimes in and out of the same stocks. My taxes are going to be a mess! :-(

[@moneymanfernando1594]

Thanks for the quick response Sasha. Another question: If I buy a stock before the ex-dividend date how long do I have to hold it to get the dividend ??

[@amsbeats841]

Question if you short sell do you get to deduct both locate fees and commissions? As in you pay tax on the actual amount that you walked away with after all those fees, platform fees etc?

[@rockefeller13]

Alex S yes

[@SwayTheBeast]

If you buy 40 dollars and sell at 30 at the loss and use the left over money to buy another stock under 30 days does that still apply or only if it's the same stock???

[@Fit_aszeus]

Great Topic, I was looking forward to learning about taxes so we as a traders could profit even more.

[@jennifer06131]

Thank you. I feel more secure on this matter.

[@tradersflyofficial]

Awesome... You are welcome

[@quantum7401]

This is fantastic information. I want to hear more about writing off losing trades: beyond the Wash Rule.

[@luissanchez5741]

Great video👍🏼

[@namegoeshere6342]

This is what I been waiting on! Thanks Great info

[@mcarthuremre1782]

this is a very nice trading strategy sir... and it works on all time frames....

[@undermygarage]

thank you for this extremely helpful video. i learned a lot!

[@tradersflyofficial]

Excellent! Thank you so much for watching and I'm glad that you really enjoyed the video.

[@zachtrout2130]

I learned some great stuff just now thanks bro :)

[@antonatanasov1744]

Hi, i'm not from USA but my question is: Are all this taxes which you mentioned (div. tax, gain tax...) are automatically taken via the brokerage firm during the whole trading or investing period or you personally file the IRS tax forms every each quarter or annual depend on you laws , or the brokerage firms take only part of the taxes and you have to declare the rest to IRS? Thanks in advance

[@yusufsiddiqui4569]

How profitable do you have to be to create an LLC for day trading and do writeoffs?

[@tradersflyofficial]

Tax situations are complex as they are individually based. Contact your accountant.

[@DAViDD767]

nice, I just go ahead and pu the tax code and read and study it from front to back, and who knows what I can find in there myself

[@eugenedyachkin]

Good stuff, thanks Sasha !

[@moneymanfernando1594]

So for a swing trader in a taxable account which accounting method is best FIFO, LIFO , or some other method ???

[@kenkoh1724]

Thanks for this. Can you recommend a good but cheap account? My trading account is only 1k so that's where I'm at.

[@rendezvu175]

I didn't know about the 1256 rule. Thanks for the info.

[@vincentnnyc]

you should mention if you swing trade on your traditional ira account, you won't be paying any taxes on your profit on any year you make a profit until your 59.5 year old. That's when you will withdraw your money and your tax bracket will be based on the amount you take out from your ira account if that is only your income when you withdraw at 59.5.

[@vincentnnyc]

even better...with roth ira....you won't pay any taxes at all on any profit you make even when you withdrawn your profit when you turn 59.5. and also you can withdrawn your principal any time you want before 59.5 and you don't pay any penalty.

[@gbarrera84]

Good stuff, thanks

[@theself5738]

I thought that if you start an LLC for investing full time then you can deduct these expenses and report the income as coming from options trades for example

[@tradersflyofficial]

Not necessarily. You typically have to be considered a full-time trader from the authorities. It's difficult to get full-time trader status unless you're trading every single day. Any case you may want to talk to your accountant about it

[@jayzee2634]

Hello Sasha, would these rules apply for a Canadian trader as well, or it just US based? Great video btw

[@olad4001]

may recommendation would be to talk to an accountant or tax lawyer who understands canadian tax laws on this issue. This is most likely your best chance at understand what you're paying and possibly minimising those taxes. Yes it costs money but its a worthwhile investment. Hope it helps :)

[@moneymanfernando1594]

Also , does dividend capture really work ?? A lot of people put up videos talking about this ??

[@johngeorge4188]

@@tradersflyofficial please answer my question i have 2500 loss i do options and i have only 700 dollar profit on my account and i do lot of buyin of same stock in option within days ,so how will i ne taxed if i have no gain at all for the year , so woulf i have to still pay tax for all my gain?

[@gengen773]

Hello how much do i have to pay tax if im trading in options ?

[@tradersflyofficial]

Depends on the options you trade... Check 1256 rule

[@MM-el9fv]

So for wash sales; for example if I buy and sell a stock of the same ticket almost everyday of the same month AND it just snowballs into a loss profit everytime... say (-$20K) loss total in wash sales and I profit in $5K total through other stocks throughout the year, that means the IRS would think I actually grossed in $25K for the year? A wash sale cannot be claimed as a loss right?

[@tradersflyofficial]

Best to contact an accountant for specific advice for your own personal tax situation

[@MegaMightypower]

how do you know how long you need to keep the stock in play before taking it out to get that longer term tax bracket? is it 365 days excatly? or does it vary?

[@pollito5452]

Never varies, it is 1 full year plus 1 day. The first day after 365 days is considered long term.

[@MegaMightypower]

Carlos Franco nice ty

[@miguelvargas9228]

Thank you !

[@tradersflyofficial]

Thanks for watching!

[@targettrading304]

can a day trader file as an s-corp?

[@marcargerbarnachea2586]

I have a question? What does it means when you have these on summary short term gains or losses report on form 8949 that I received on robinhood 1099. Proceeds: $956,527.29 Cost basis: $973,999.17 wash sale loss disallowed: $19,591 Realized Gain or (loss): ($17,471.88) It means i have $17,471.88 loss? it's that correct? thanks

[@marcargerbarnachea2586]

thank you:)

[@1ReedsWorld]

Sasha I have question how do I invest in a Company before It goes public?

[@BryTheNiceGuy]

Reed Greenfield you can't do that since being public for a company means that you can find it on the stock market. If you want to invest in it, you'd have to go old school by maybe buying part of the company after talking to owners, etc.

[@craigg7903]

What about dividend reinvestment ? How does the taxes work on that ?

[@craigg7903]

Sasha Evdakov thanks !

[@SwayTheBeast]

Craig G I was taught avoiding taxes via reinvestment isn't true and a wide misconception you still need to record the dividends received in your tax return

[@mattmcghee1137]

where would a swing trader fall into, I can hold a trade for a few days to weeks at most

[@KalemStLouis]

You serious? It’s a short term capital gain.

[@williampennjr.4448]

What I never understood is why capitals gains are taxed at the same rate whether you held it for 1 year, 5 years, 10 year or 20 years or longer. Who in their right mind thinks that's fair? Ever heard of inflation? Why can't I at least deduct the inflation rate on my longer term gains?. Also what the f

[@cinematic_rc]

You don’t pay payroll taxes on capital gains or dividends as an individual trader

[@zmanman6404]

I kinda skipped through his vid. But did he mention anything about Loss Harvest on on the trades?

[@jajasmile5321]

Yes that's fine

[@danielquick4104]

I'm

[@carligreen3960]

took you 2.5 minutes to actually get to what the video was about

[@tradersflyofficial]

Yes sometimes when movies, videos, or in life there is lag time and it does take time to get to what you're looking for. It's for this reason romance comedies still take 90 minutes to tell you the happy ending.

[@pjperdomo]

Great Video. Thank you Sasha!

[@tradersflyofficial]

you're more than welcome! thank you so much for watching.