When you sell stock, the money you make is taxed as capital gains. How much you’re taxed depends on a few things, but the length of time that you owned your stock is the biggest differentiator. Here’s some info on stock sales.
1. Your 1099-B has the info you need
To figure out whether you have short- or long-term gains, take a look at your 1099-B form. Your purchase date will be listed in box 1b; and your date acquired, and date sold will be listed in box 1c. That amount of time is what will determine how your sale profits are taxed. You can also take a look at box 2 — there should be a checkmark that identifies the sale.
2. Held for more than 1 year = Long-term capital gains
If you held on to your stock for more than one year, it’ll be taxed at the long-term capital gains tax rates of 0%, 15% or 20%, depending on your income.
Held for 1 year or less = Short-term capital gains
If you held your stock for one year or less, it’ll be taxed at the short-term capital gains tax rates of 10%, 12%, 22%, 24%, 32%, 35% or 37%, depending on your income.
Just enter the info from your form as it appears, and we’ll calculate everything for you.
3. You can deduct your losses
If you sold at a loss, you can offset that amount from your overall gains, reducing the amount you’ll be taxed on. And if your losses were more than your gains, you can deduct up to $3,000 this year. Any losses more than that, can carry forward into next year and be deducted against future gains. When you come back next year, your information will be saved to make this easier.