Making money from stocks is always super exciting 🚀

But, here’s how to collect profits responsibly 🤝

💡 Capital Gains Tax = a tax on investment profits

However, you only have to pay capital gains tax if you make more than $47K/year 🤑

Let’s say you bought Apple stock for $10 and then sold it for $50. 🍎

If you made less than $47k this year, you wouldn't need to pay taxes on the $40 profit, but if you made more than $47k, you're on the hook! 💸

Capital Gains Tax can apply to any investment you make money on including stocks, bonds, mutual funds, real estate, and even collectibles 🏷️

The tax rate for Capital Gains usually lower than the tax rate for income, so you may be able to save money if you plan ahead and optimize your investing strategy to minimize taxes 📝

In particular, Capital Gains Tax also has rules about how long you must hold onto the asset before it can be sold in order to qualify for a lower tax rate ⏰

If you hold a stock for at least 1 year, you're subject to a lower Capital Gains tax rate 🎉

But if you buy and sell a stock within a year, you'd have a higher Capital Gains tax rate 🥲

In addition, if you lose money on an investment, you can often reduce your future taxes for both regular income, and Capital Gains! 🤔

Even though you don't have to worry about Capital Gains unless you make more than $47k / year from investing, it’s an important thing to understand for your financial future 🤓