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Message
NewInvestor Tax Question Next Year
Posted on 4/17/12 at 12:31 pm
Posted on 4/17/12 at 12:31 pm
Looking towards next year concerning taxes for a first time investor. I currently invest through scottrade and was wandering how taxes would work for next year.
If i make a few trades a month, at the end of the year I know i would pay taxes on the gains but what if I never take money out of the account. Do I still pay taxes or do I only pay taxes when I remove profits??
I invested 3000 in january and now up to 6000 and would like to start planning on what i will be paying on taxes next year.
First time poster, Long time reader!!
If i make a few trades a month, at the end of the year I know i would pay taxes on the gains but what if I never take money out of the account. Do I still pay taxes or do I only pay taxes when I remove profits??
I invested 3000 in january and now up to 6000 and would like to start planning on what i will be paying on taxes next year.
First time poster, Long time reader!!
3
Posted on 4/17/12 at 12:37 pm to SaintsMaximum
You should just move the money over to a ROTH and not worry about taxes.
Posted on 4/17/12 at 12:41 pm to SaintsMaximum
quote:
If i make a few trades a month, at the end of the year I know i would pay taxes on the gains but what if I never take money out of the account. Do I still pay taxes or do I only pay taxes when I remove profits??
Once you sell, you have to pay income tax. It doesn't matter if the cash is sitting in your brokerage account or in the bank. You are "removing profits" the moment the transaction is complete.
Posted on 4/17/12 at 12:51 pm to TheHiddenFlask
Why should I invest in Roth if I allready have a Company 401(k).
Iam using this money to mess around and learn the market. Remember I am a first time investor Thats why I only invested 3000.
I allready doubled my initial investment in 4 months. Isnt the max you can contribiute if you allreay have a 401k is 5000 into the roth?
Iam using this money to mess around and learn the market. Remember I am a first time investor Thats why I only invested 3000.
I allready doubled my initial investment in 4 months. Isnt the max you can contribiute if you allreay have a 401k is 5000 into the roth?
Posted on 4/17/12 at 12:52 pm to SaintsMaximum
+1 For the Roth!
Especially considering impending tax changes in January 13
Especially considering impending tax changes in January 13
Posted on 4/17/12 at 1:02 pm to SaintsMaximum
quote:
Why should I invest in Roth if I allready have a Company 401(k).
Because you won't have to pay taxes on any money you make.
quote:
Iam using this money to mess around and learn the market.
Okay.
quote:
Remember I am a first time investor
Okay.
quote:
Thats why I only invested 3000.
Okay.
Sounds like a Roth would be better for you.
quote:
I allready doubled my initial investment in 4 months.
Roth would have saved you 25% in taxes.
quote:
Isnt the max you can contribiute if you allreay have a 401k is 5000 into the roth?
yes.
Today is the last day you can contribute for 2011 (I think?). You could have put your 3k in immediately and not paid tax, or put your 6k in a couple of weeks ago and still been able to put in another 4k this year.
Posted on 4/17/12 at 1:15 pm to TheHiddenFlask
Thanks for the Suggestions. I will start a roth this year and put 5000 in and I guess with the rest I will plan on the 25% tax rate.
Posted on 4/17/12 at 1:24 pm to SaintsMaximum
quote:
I guess with the rest I will plan on the 25% tax rate.
I usually don't partake in tax accounting questions, as there are many people here that are smarter in that subject than I am.
However, I'm pretty sure that you are just taxed on short term schedule D (read: trading profits) at your normal income tax rate. This is effectively your highest marginal tax rate, which is 25% for me.
Posted on 4/17/12 at 1:32 pm to TheHiddenFlask
Any suggestions on who to go with for Roth?? My 401K is with Merrill Lynch through the company I work for..
I will just plan on the 25% and hope its less.
I will just plan on the 25% and hope its less.
Posted on 4/17/12 at 1:43 pm to SaintsMaximum
Scottrade is cheap and functional.
Etrade is a little more expensive, but has an incredible user interface.
I would not go with fidelity.
Those are the three companies that I use. Etrade is generally well regarded on this board.
Etrade is a little more expensive, but has an incredible user interface.
I would not go with fidelity.
Those are the three companies that I use. Etrade is generally well regarded on this board.
Posted on 4/17/12 at 1:43 pm to TheHiddenFlask
quote:
However, I'm pretty sure that you are just taxed on short term schedule D (read: trading profits) at your normal income tax rate. This is effectively your highest marginal tax rate, which is 25% for me.
+ state income tax rate if any.
Posted on 4/17/12 at 1:44 pm to SaintsMaximum
I'm not the most tax qualified guy either but I know what is practical and what I need to know. Go put the 5000 TODAY but it might be to late for 2011 in a Roth as it will take time to fund the account etc. oh well.
Going forward, your cap gains in the Roth won't be taxed. You don't even need to bother printing a gain loss form for your CPA. If you have $ outside a tax sheltered account, you will pay your effective income tax rate on investments held less than 365 days. On investments held more than 365 days you will pay a flat 15% cap gains tax. Oh and dividends get taxed to but like I said a lot of this may change very soon.
Anyone does roth's. Your bank, e trade, ameritrade, etc. I have an etrade and ameritrade and I like Ameritrade better. Just my opinion
Going forward, your cap gains in the Roth won't be taxed. You don't even need to bother printing a gain loss form for your CPA. If you have $ outside a tax sheltered account, you will pay your effective income tax rate on investments held less than 365 days. On investments held more than 365 days you will pay a flat 15% cap gains tax. Oh and dividends get taxed to but like I said a lot of this may change very soon.
Anyone does roth's. Your bank, e trade, ameritrade, etc. I have an etrade and ameritrade and I like Ameritrade better. Just my opinion
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