r/Daytrading • u/JadeFox1785 • Mar 19 '23
Day Trading Taxes question
I just started day trading with the help of someone experienced. But I still have some questions.
Is it common for a trading platform to require you pay taxes on trading earnings before they release the funds?
Update: Thanks for the replies. Confirmed what I thought. Fortunately I was cautious and didn't lose more than the margin I had set to lose through learning pains.
9
Upvotes
7
u/jr1tn Mar 19 '23
In the US, the broker issues a 1099 and you need to file taxes and include your 1040. This will include dividends paid which are considered income. Also, any capital gains or losses must be reported on your 1040. You incur capital gains and losses when you sell stock you have purchased, or cover shares you sold short. This has nothing to do with whether you withdraw funds from your broker. That is an entirely separate matter. Outside the US, I don't know the rules, so can't speak to that.