I left a job a while back and i had some shares in the company that equalled out to around $5,000. What I want to know is how much of that is taxed when i cash it out? Is it taxed just like a 401k if you cash that or is it different?
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I left a job a while back and i had some shares in the company that equalled out to around $5,000. What I want to know is how much of that is taxed when i cash it out? Is it taxed just like a 401k if you cash that or is it different?
i trade from time to time and im pretty sure that when you buy a stock and sell it within a year you will pay 28% tax. If you keep the stock for more than a year and decide to sell it you will pay 15%. This past year i lost about 1k which is ok with me since i dont do the standard gambling(lottery,casino etc) and since i made 1,500 in the past im still up a little lol.
so more than likely on my next years tax returns than ill have to pay 15% of that chunk of change?
What he said.
Short term capital gains (less than 1 year) are at your marginal tax rate... typically around 30%
Long term are 15%
If it's in a 401k/IRA, you have to pay taxes PLUS 10% to get it out of there, or you can leave it there til you retire.
ok cool 15% isnt as bad as i thought. Now I just saw something about the 25/15% tax brackets and if i was in the 15% bracket then i would only get my stocks taxed only 5%, well since i am married is my tax bracket considered mine personally or me and my wifes included together to find out our tax bracket?
the first number i gave, 28% is the bracket im in and most middle class of course the more money you make the higher the bracket. Same is true for if you make less but it really won't change much and you should really figure on 30% if you sell in the first year. I do know the 15% is across the board... Dont sweat it so much and think of stock trading as a second job without the taxes taken out, which you have to pay the year you sell the stock.
oh and to be in the 15% tax bracket you would have to make piss money 10k a year at your job.
looks like im really in the 25% bracket but currently paying 28% which would be true due to me getting a nice return at the end of the year... here is a link to find where you stand..
http://www.edwardjones.com/cgi/getHT...last_year.html
Quote:
Originally Posted by Mike Hawk
Did you buy the stock outright, was it a stock option, or were they given to you as compensation?
The answers above are correct if you bought it outright. Report it on the Sch D of your 1040 and pay capital gains taxes (on the gain, not the price you sell it for).
If it was an option, it depends on whether it was qualified or not. You will probably have an ordinary income piece and a capital gains piece - but it is entirely possible that it will all be ordinary income.
If it was given to you as compensation, it will be reported on your W-2 and will be taxed as ordinary income just as your wages are. You basis will be the fair market value when it was given to you (the amount you paid the tax on). If it goes up in value from that time you will have capital gains on top of that.
Where is FUTURETRADER when you need him......
GWBALLIN: It was stock options, so i guess i can be looking at taxes taking 15%
Most stock options will work as follows, the difference between the option price and the fair market value will be included as wages on your w-2 and will be taxed at your marginal tax rate just like the rest of your wages, in other words in depends on what bracket you are in.Quote:
Originally Posted by Mike Hawk
Your basis in the stock will be the option price plus the amount that was included in your wages (this should equal the fair market value on the day you exercise the option). If you sell the stock the same day your basis should be higher than the gross proceeds from the sale because of commissions resulting in a small capital loss.
Please keep in mind that I say most stock options work that way. There are a number of different types and they are not all taxed the same way but I provided the info for the type that is most common.