If You Invested In Stocks or Cryptocurrency In 2021, Here's What You Can Expect
Investing in stocks and cryptocurrency is a great way to watch your money grow. However, figuring out how to properly handle the taxes associated with investing can be complicated, but have no fear, Motor City Tax Pros is here. With two locations in the Detroit area and a combined 30 years of experience, our team can help by providing you with excellent tax planning services. To learn more about investment taxes, keep reading or call us today to get started!
You Need To File This
All profits made from the sale of your stocks or crypto are taxed by the IRS. You must file these correctly each year to stay out of trouble and get the best return possible. All investment profits are taxed at a rate of 0%-20% and the amount owed depends on how you file.
Get 1099B Form
If you buy, sell, or trade stocks and cryptocurrencies with a broker or a bartering network you will need to get the 1099 B form. This form can be received in the mail or electronically with services like Motor City Tax Pros. This form gives you a summary of what you sold, when, and how much you received.
Capital gains are the money you receive from the purchase or sale of stocks and crypto. They are classified as either short-term or long-term gains. Short term gains are profits held for one year or less and long term gains are profits that are held over a year. Both are filed differently depending on income and filing status.
Deduct Your Losses
You can use investment capital losses to offset your gains when filing your taxes. If you subtract your losses from your gains, you will be taxed on the difference between the two. You can also deduct up to $3,000 a year if your losses exceed your gains.