{"id":81,"date":"2022-01-04T15:11:37","date_gmt":"2022-01-04T15:11:37","guid":{"rendered":"https:\/\/c1mdevsite.com\/braunability.com\/taxes-on-stocks-what-you-need-to-know-for-2022\/"},"modified":"2022-01-04T15:11:37","modified_gmt":"2022-01-04T15:11:37","slug":"taxes-on-stocks-what-you-need-to-know-for-2022","status":"publish","type":"post","link":"https:\/\/c1mdevsite.com\/mdctraining.ca\/taxes-on-stocks-what-you-need-to-know-for-2022\/","title":{"rendered":"Taxes on Stocks \u2013 What you need to know for 2022"},"content":{"rendered":"
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In the past several years, with the pandemic in full swing and stimulus payments boosting the American economy, more and more everyday individuals started to explore the ins and outs of the stock\u00a0market. Once reserved for private investment firms and professional traders, now anyone can easily purchase and sell stocks through popular online platforms such as\u00a0E*TRADE\u00a0or Robinhood, which have boomed when it comes to new users over the past several years.<\/span>\u00a0<\/span><\/p>\n

However,\u00a0just like all investments, when it comes to the stock market, your annual taxes need to be taken into account.\u00a0So,\u00a0review the following primer on how calculating and addressing taxes works on your annual 2021 tax return, so you\u2019ll have a leg up before the April 15, 2022 deadline.<\/span>\u00a0<\/span><\/p>\n

The Basics<\/span><\/b>\u00a0<\/span><\/p>\n

First of all, in the United States, you will owe taxes on your stocks only if you sell them. For example, if you purchased a stock in the past that has grown\u00a0exponentially\u00a0in value, but you haven\u2019t sold and profited off the\u00a0investment just yet, there is no need to pay taxes on any perceived profits that you\u00a0will\u00a0make in the future.<\/span>\u00a0<\/span><\/p>\n

If, however, you did sell stocks in 2021, then your annual taxes will come into play, in the form of short-term or long-term capital gain taxes.\u00a0Capital\u00a0gains are the profits you make when you sell any investment, which includes stocks, but also\u00a0includes\u00a0investments such as\u00a0bonds, mutual funds, precious metals, cryptocurrencies,\u00a0collectables (like coins or antiques), and even real estate.<\/span>\u00a0<\/span><\/p>\n

So,\u00a0when it comes to how much you\u2019ll owe on your annual taxes, the IRS divides capital gains into two categories: long-term capital gains and short-term capital gains. It\u2019s important to understand the difference between both\u00a0situations, as it can have a big impact on your bottom line this year, and moving forward.<\/span>\u00a0<\/span><\/p>\n

Long-term capital gains tax\u00a0<\/span><\/b>\u00a0<\/span><\/p>\n

Long-term capital gains taxes are for profits you have earned on stocks that you have sold, but which you previously owned for more than a year. For example, if you purchase a stock on January 1, 2020, and sold it a year and a day later, (on January 2, 2021), your profits would be subject to the 2021 long-term capital gains tax rates.<\/span>\u00a0<\/span><\/p>\n

The long-term capital gains tax rates\u00a0are determined by income, and include the following:<\/span>\u00a0<\/span><\/p>\n