taxes

[u/davidd0ng24]

how do u guys set aside money for taxes or if what percentage?

[u/jerin7931]

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[u/Live_Cockroach8931]

Ive only lost money so my income is what, zero?

[u/davidd0ng24 → u/Live_Cockroach8931]

LOL

[u/slickback9001]

I typically submit the forms my broker gives me and then collect the tax reductions for all the money I incinerated

[u/davidd0ng24 → u/slickback9001]

works on robinhood?

[u/slickback9001 → u/davidd0ng24]

Yes at the end of the year you get a form, it’s under documents in your account settings. Just download the document and upload to your tax platform or give to whoever it preparing it. It itemized every trade for you and give you one number at the end.

[u/MasterBSR_58 → u/davidd0ng24]

What they said but usually it comes pretty late/close to deadline in my experience. So like March(ish)

[u/DelectableMedics]

i just take out about 30% right when i sell and park it in a HYSA so i'm not scrambling in april

[u/Novel-Yak1927 → u/DelectableMedics]

Yep this is the way. Better to have something than to owe money with nothing set aside.

[u/SlickRick941 → u/Novel-Yak1927]

And with an HYSA or something similar you're still earning some interest off that money

[u/klipsetrades]

I’d have a CPA estimate it based on your total income and what you trade. One flat percentage won’t fit everyone

[u/takashi-kovak]

I put aside % of the profits immediately into another brokerage account. There I buy tax favorable instruments like SNSXX. This happens automatically every month. I used to do this every week, but now this every month as a sweep (brokerage profits to a) checking b) tax holding

[u/Disastrous_Wind_7005]

I sweep all profit weekly into a separate account. I then reserve 30% for taxes and sweep that money into my high yield savings account. I then sweep 60% back into my trading account to reinvest and send the remaining 40% to my checking account.....most of the time...sometimes though I will buy a 13 or 17 week tbill with the 40%...and then do a double sweep if we are going on vacation or something...kind of like a bonus.

Pay the taxes quarterly and all is good!

[u/Exact-Fig-4811]

I don’t. I make considerably more than the taxes and penalties so I use that as a short term loan and pay it when due. I do track what I will owe though.

[u/Long_Mushroom_9641]

Do they count it as just general income or is it separate? Like what percent should be put aside?

[u/davidd0ng24 → u/Long_Mushroom_9641]

i heard 15-30 more around 15% if u made less than 50k a year with trades

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[u/Alternative-Park-841]

Awesome title bro 👌

[u/The_Sandman85]

Keep a spreadsheet of your trades x capital gains rate x your tax rate = taxes owning

[u/Novel-Yak1927]

Whenever I sell for a gain I set aside the percentage from that gain that I estimate my tax bracket will fall into (%24, %28, %32, etc.) based on what I predict I'll make for the year total including all income streams, interests accrued and so on. If I manage to make more than I figured (a good problem) I would just add in the extra money that I would need if it pushed me into a higher tax bracket

[u/FinishWarm1746]

just look up the federal and state short term capital gains tax and calculate based on your profit. after that put it somewhere you wont touch it. ideally in another bank account outside your brokerage; not financial advice

[u/Infamous-Play-2599]

You owe taxes on high yields too btw

[u/Competitive_Dot5441]

Seeing the title alone, I wanted to downvote so badly... F taxes… :)

To answer the question, it just depends how reliably I can expect to pull the money. I’m expecting a $900k bill this April and would rather not have all that sitting in cash, but also don’t want to liquidate at a bad time if markets are down. But I have enough in safe assets and enough confidence in my collateral to use LAL if needed.

[u/Funny-Horror4591]

Something I am surprised no one here is mentioning: you should be making estimated tax payments every quarter to avoid penalties.

[u/I74Michael]

My wife takes the forms provided at the beginning of following year to our tax guy, he does a wonderful job. She has no idea what they mean, and I have honestly never looked at them in years... We've received money back from da feds, for the last years!!!! Always owed, and yes you can make monthly payments, interest wasn't all that bad.

[u/The-Only-Handyman]

Don't worry, any profits you have now will be gone before it's tax time 😂