Trading Tax Calculator

Calculate taxes on trading profits, capital gains, and investment income. Professional tool for estimating federal, state, and NIIT taxes with wash sale considerations.

TAX ESTIMATE ONLY

This calculator provides estimates based on 2024 tax rates. Consult a qualified tax professional for personalized advice and accurate tax filing.

Tax Information

Filing Status:

Annual Income ($):

Ordinary income (salary, etc.)

Capital Gains & Losses

Short-Term Gains ($):

Assets held ≤ 1 year

Long-Term Gains ($):

Assets held > 1 year

Capital Losses ($):

Realized losses

Wash Sale Losses ($):

Disallowed losses

Dividend Income

Total Dividends ($):

Qualified Dividends ($):

Taxed at LTCG rates

Additional Parameters

Trading Expenses ($):

May not be deductible

State Tax Rate (%):

Varies by state

Total Tax Liability

Enter tax information to calculate

Tax Breakdown

Tax breakdown will appear here

Income Summary

Ordinary Income:$75,000

Short-Term Gains:$15,000

Long-Term Gains:$10,000

Dividends:$2,000

Tax Optimization Tips

Hold investments >1 year for preferential LTCG rates

Use tax-loss harvesting to offset gains

Avoid wash sales - wait 31 days to repurchase

Consider IRAs/401(k)s for tax-deferred growth

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Understanding Trading Taxes

Master the fundamentals of capital gains taxation and investment income

Capital Gains

Short-Term: Assets held <1 year, taxed as ordinary income (10-37%).

Long-Term: Assets held >1 year, preferential rates (0%, 15%, 20%).

Holding period starts the day after purchase.

Wash Sale Rule

Cannot claim loss if you repurchase same/similar security within 30 days before or after sale.

Window: 61-day period (30 days before + day of sale + 30 days after).

Disallowed loss adds to cost basis of repurchased security.

Net Investment Income Tax

Additional 3.8% tax on investment income when MAGI exceeds thresholds.

Thresholds: $200k (single), $250k (married).

Applies to interest, dividends, and capital gains.

2024 Capital Gains Tax Rates

Tax-Free LTCG

For lower income taxpayers.

• Single: Up to $47,025
• Married: Up to $94,050
• Head: Up to $63,000

15%

Standard LTCG

Most taxpayers fall here.

• Single: $47,025-$518,900
• Married: $94,050-$583,750
• Head: $63,000-$551,350

20%

High Income LTCG

For high earners only.

• Single: Over $518,900
• Married: Over $583,750
• Plus 3.8% NIIT may apply

Tax Optimization Strategies

Strategic approaches to minimize your trading tax burden

Tax-Loss Harvesting

Strategically sell losing positions to offset capital gains and reduce tax liability.

Strategy Benefits:

• Offset unlimited capital gains with losses
• Deduct $3,000 against ordinary income annually
• Carry forward excess losses indefinitely
• Maintain market exposure with similar investments

Holding Period Strategy

Hold investments longer than one year to qualify for preferential long-term capital gains rates.

Tax Savings Example:

• $10,000 gain, 24% bracket (STCG): $2,400 tax
• Same gain held >1 year (LTCG): $1,500 tax
• Savings: $900 (37.5%)
• Track purchase dates carefully

Tax-Advantaged Accounts

Utilize retirement and tax-deferred accounts to minimize or eliminate investment taxes.

Account Options:

• Roth IRA: Tax-free growth and withdrawals
• Traditional IRA/401(k): Tax-deferred growth
• HSA: Triple tax advantage for health
• 529 Plan: Tax-free education savings

Asset Location

Strategically place investments in taxable vs tax-advantaged accounts based on tax efficiency.

Optimal Placement:

• Taxable: Index funds, muni bonds, LT holdings
• Tax-Deferred: Bonds, REITs, active trading
• Roth: High-growth stocks, future income
• Consider turnover and dividend rates

Frequently Asked Questions

Common questions about trading taxes and capital gains

Q
What's the difference between short-term and long-term capital gains?

The distinction is based on how long you hold an asset before selling it, with significant tax rate differences.

Short-Term (≤1 year):

• Taxed as ordinary income

• Rates: 10%, 12%, 22%, 24%, 32%, 35%, 37%

• Based on your tax bracket

• No preferential treatment

Long-Term (>1 year):

• Preferential tax rates

• Rates: 0%, 15%, or 20%

• Based on income level

• Significantly lower tax burden

Example: A $10,000 gain for someone in the 24% bracket costs $2,400 (short-term) vs $1,500 (long-term) - a $900 savings.

Q
How much capital loss can I deduct per year?

Capital losses can offset capital gains dollar-for-dollar, with a limit on deductions against ordinary income.

Deduction Rules:

• Offset unlimited capital gains with losses

• Deduct up to $3,000 against ordinary income per year

• $1,500 limit if married filing separately

• Excess losses carry forward indefinitely

• No expiration on carryover losses

Example: $20,000 loss with $10,000 gains = $10,000 net loss. Deduct $3,000 this year, carry $7,000 forward.

Q
What is the wash sale rule?

The wash sale rule prevents you from claiming a tax loss if you repurchase the same or substantially identical security too quickly.

Rule Details:

• 61-day window (30 days before + sale day + 30 days after)

• Applies to same or "substantially identical" securities

• Loss is disallowed for current year

• Disallowed loss added to cost basis of new purchase

• Holding period also transfers

Avoid by: waiting 31+ days, buying similar (not identical) securities, or selling from different account.

Q
What is the Net Investment Income Tax (NIIT)?

NIIT is an additional 3.8% tax on investment income for high earners, enacted as part of the Affordable Care Act.

Who Pays NIIT:

• Single: MAGI > $200,000

• Married Joint: MAGI > $250,000

• Married Separate: MAGI > $125,000

• Head of Household: MAGI > $200,000

What's Taxed:

• Capital gains (short & long-term)

• Dividend income

• Interest income

• Rental and passive income

Applied to lesser of: net investment income OR excess over threshold. Can significantly impact high earners.

Q
How are qualified dividends taxed?

Qualified dividends receive preferential tax treatment at long-term capital gains rates rather than ordinary income rates.

Qualification Requirements:

• Paid by US corporation or qualified foreign corporation

• Stock held >60 days during 121-day period around ex-dividend date

• Not listed as non-qualified (REITs, MLPs, etc.)

• Taxed at 0%, 15%, or 20% based on income

Non-Qualified Dividends:

Taxed as ordinary income at your marginal rate (10-37%). Includes most REIT dividends, money market funds, employee stock options.

Q
Can I deduct trading expenses?

Under current tax law (post-2017 Tax Cuts and Jobs Act), most individual investors cannot deduct trading-related expenses.

Not Deductible:

• Subscriptions and data feeds

• Trading education and courses

• Investment advisory fees

• Home office for investing

Possible Exceptions:

• Mark-to-market traders

• Trader tax status (TTS)

• Professional traders with business

• Must meet strict IRS criteria

Consult a tax professional to determine if you qualify for trader tax status or other deductions.

Q
What is tax-loss harvesting?

Tax-loss harvesting is the practice of selling investments at a loss to offset capital gains and reduce your tax liability.

Strategy Steps:

1. Identify losing positions in your portfolio

2. Sell to realize the loss before year-end

3. Use losses to offset capital gains dollar-for-dollar

4. Deduct up to $3,000 excess against ordinary income

5. Reinvest in similar (not identical) security to maintain exposure

Caution: Avoid wash sales by waiting 31 days before repurchasing. Consider using ETFs with similar exposure in the meantime.

Q
How accurate is this calculator?

This calculator provides estimates based on 2024 federal tax law, but several factors may affect your actual tax liability.

What's Included:

• Federal income tax brackets

• Long-term capital gains rates

• Net Investment Income Tax (NIIT)

• Basic state tax estimation

• Capital loss limitations

Not Included:

• Alternative Minimum Tax (AMT)

• Phase-outs and itemized deductions

• State-specific rules and variations

• Local taxes and additional surtaxes

Always consult a qualified tax professional for personalized advice and accurate tax filing.