The Covid pandemic grounded millions of us in early 2020 and at least 8 million people filled some of their newfound time opening new brokerage accounts to trade. I mean the Robinhood app as well as zero cost trades at major discount brokerage firms lured largely novice traders into gambling with swift buys and sells.
Trading accounts across the globe tripled from 2019, according to a survey by BrokerChooser.
Too many of these traders missed the memo that taxes would chew into their profits, especially if they didn’t hold their positions for one year and one day to qualify for the far lower long-term capital gains rates.
Now they will be subjected to declaring their gains as short-term capital gains, taxed as Ordinary Income, brackets of which extend upwards of 37%. What ultimately matters is the amount of money we KEEP rather than what we make and the difference is taxes.