Keep up with how much of your seed money from your already taxed assets you put into forex, I know im on my own come tax time but that’s ok, i treat the account like a rolling balance if i ever do make enough to worry about taxes, as long as its in the account its invested, when I will pay taxes is when it comes out.
Hello, what if for example i had $10,000 in my account. I then made periodical withdrawals that summed up to $800 after the year ends. However, my account lost $2,000 or more from that year. So do I still need to pay taxes for that?
I dont’t pay taxes since I withdraw profit on Skrill and get my money as remittances, they are not taxable.
In Ontario, Canada, profits (over $200) from forex are considered capital gains. Capital gains are taxed at 50% of your profits, based on your tax bracket.
For example. If you make your living trading stocks or FX and you made $100k profit for the year, 50% of that profit ($50k) is taxable at your tax bracket level.
“Several years ago, the Canadian government cut the capital gains inclusion rate (the percentage of gains you need to “take into income”) from 75% to 50%.
For example, if an investor purchases stock for $1,000 and then sells that stock for $2,000, they will have a $1,000 capital gain. Investors pay Canadian capital gains tax on 50% of the capital gain amount. This means that if you earn $1,000 in capital gains, and you are in the highest tax bracket in, say, Ontario (53.53%), you will pay $267.65 in Canadian capital gains tax on the $1,000 in gains.”
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Yes, everything related to money and significant sums are taxed, which even applies to forex trading. However, you will have to pay taxes only for large amounts. If you invest a little money, you will not pay taxes.
Will entirely depend on where you are in the world. Some treat it as income, others capital gains.
Forex trading is tax-free in the UK if spread betting by amateur speculators. How do you pay taxes on foreign exchange? In the UK, if you are obligated to tax your personal profits from foreign exchange transactions, it will be paid and collected as Capital Gains Tax (CGT) at the end of the tax year.
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Every country has its own tax system, so you will probably have to check it with a CA or a tax lawyer to get a better idea.
According to the latest GST news, foreign exchange transactions are currently taxed between 5% and 18%, similar to other commercial transactions.
In the UK it is legal to trade forex via spread betting. Spread betting profits here are exempt from taxation.
Really depends on your location I know in some countries you can do spread betting in most its capital gains tax
I filed taxes for 2021 and it was a nightmare. I had to do all my trades on an excel spreadsheet and calculate a cost basis. Other brokers do not issue tax documents for your trading and MT4 you can print out all your trading but it does not give you the cost basis for your trades. I had to do some complicated math to do it. I had a loss of 227 from my forex trading over 100 trades. It took me 8 hours to do it. I rather trade with a prop firm because it is better for your taxes and you risk no money.
I am in the United States.
Care to share who your broker is? 8 hours seems super long to calculate your gains/losses. Did you file as a 988 or 1256 trader?
I am not sure how to check is 988 or 1256. I had capital gains on stocks/options and crpyto. I used Forex . com and Oanda for the broker. Where would I look in the tax return for 988 or 1257? Both brokers just show gains/losses and not cost basis. With trading stocks you get a tax form and cost basis for your trades and you can upload all trades to turbo tax.
i believe spot forex gains/loss are considered under Section 988 contracts, and are taxed as ordinary income or loss, not capital gains. Section 1256 contracts only come into play if you’re trading futures contracts, or forex options, or you specifically elect at the beginning of the year to be considered a 1256 trader instead of 988. Those 1256 contracts are taxed as capital gains or losses using the 60%/40% rule. 60% of gains or losses are counted as long-term capital gains or losses. 40% is counted as short term.
Some resources to get you going:
https://greentradertax.com/trader-tax-center/tax-treatment/forex/
I’m not an accountant or tax advisor, so please DYOR.