I live with my parents and have a decent job. This year, I bought and sold three stocks and ended up with a total gain/loss of $14.96. I already filed my tax return, but I don’t really understand how taxes on stocks work.
Do I need to be concerned about this? Or is it such a small amount that I don’t need to worry?
Did you sell your stocks? Capital gains tax only applies when you sell, not just because the value goes up or down.
Xian said:
Did you sell your stocks? Capital gains tax only applies when you sell, not just because the value goes up or down.
Yeah, I sold them after about five days. Got cold feet.
@Ashley
Got it. In that case, you technically owe taxes on the $15 gain, which would only be a couple of dollars depending on your tax rate. The IRS isn’t going to come after you over that amount, but next year, make sure to wait until you have all your tax documents before filing. Filing too early can cause issues.
@Ashley
For the future, it’s better to avoid jumping in and out of individual stocks, especially if you’re new to investing. Consider putting your money into low-fee index funds or target date funds instead. They spread your risk across many stocks, so you don’t have to worry as much about short-term market swings.
If you bought and sold them in 2024, then you’ll report that $15 gain on your 2024 tax return, which you’ll file next year. Since you already filed this year’s return, it won’t matter until next tax season.