Robinhood Traders Face the Taxman26 Jan 2021 14:03
...After Falling In Love With Stocks
What should you know if you made money on your investments last year?
That’s the reality dawning on U.S. investors who began buying and selling stocks on apps such as Robinhood last year, when they were cut off from other pastimes during pandemic lockdowns. At least 8 million people opened new brokerage accounts in the first nine months of 2020 — many of them young traders who were dipping their toes into the investing pool for the first time.
""The U.S. tax code penalizes speculative trading by taxing short-term gains at a higher rate than long-term gains. The dividing line is one year: To get the lower, long-term capital gains rate, investors must hold onto a stock for a year and a day. Married couples who earn up to $80,000 pay nothing on long-term capital gains and qualified dividends. Most other middle-class income groups pay 15%, and the top rate for high earners is 23.8%. Short-term gains, meanwhile, are taxed like ordinary income, at a top rate of 37%.
Those who made big short-term gains in the market last year may owe a hefty check to the Internal Revenue Service and, depending on where they live, to their state tax collection agency.""
https://www.bloomberg.com/news/articles/2021-01-26/tax-for-trading-stocks-robinhood-investors-confused-over-how-much-they-must-pay
DYOR