Plan Carefully to Avoid Tax Burden from Online Trading

Remember the story about the cobbler whose children had no shoes? In the accounting arena, don't be surprised at tax time-especially if you provide tax advice yourself-by a tax burden based on any gains you experienced from online trading.

Since online trading is such a hot "commodity," many taxpayers will no doubt have problems come tax time. Remember the differences between stocks held for less than a year versus more than 12 months. Stocks held 12 months or less are taxed at the same rate as the rest of your income, while those long-term stocks are taxed at a maximum of only 20 percent.

Still, the key is an investment strategy to ensure you are reaping the best financial rewards possible from online trading, regular trading opportunities and other investments.


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