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Paying Taxes in 2022: What You Need to Know


I was lured into the meme stock madness. What do I need to know?The federal government is coming for its share of your winnings. If you were trading in a regular brokerage account (and not a tax-advantaged individual retirement account, for example) and made a profit, you may owe capital gains taxes.Short-term gains — those realized after selling shares held for one year or less — are taxed at your ordinary income rate. The more favorable long-term rate kicks in when shares are held for more than a year. (Higher-income investors will often owe an added “net investment income tax” of 3.8 percent on gains, regardless of how long they held the stock.)Losses offset winnings, and up to $3,000 in net capital losses can be deducted from your ordinary income. Any remaining losses carry into future years.There’s a catch that could surprise many amateurs, known as wash sales. If, for example, you sold shares at a loss and then quickly bought them back ag …

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