Day traders can violate the wash sale rule because of their trading frequency. However, it isn’t only day traders who are susceptible to this tax rule. The worst part is that many people have no idea how it works or that it exists, allowing the rule to creep up on them. The result can be an increased tax bill. We’re going to look at what the wash sale rule is, along with a few examples of how it works.
If you own property and you want to sell, you might be considering strategies to potentially defer capital gains taxes. This is where an installment sale might come in handy. An installment sale allows a buyer to pay for your property over time. This can help defer taxes, as you aren’t receiving a single lump sum.
Well-thought-out investments can lead to interest. That’s the potential upside of an investment. But with that potential upside comes a responsibility. Specifically, any investment income above $10 requires the payer to issue a Form 1099-INT to the investor. Payers can include banks, other financial institutions, brokerage institutions, mutual funds, or any other entity that pays interest to a taxpayer.
Paperwork and forms are part and parcel when it comes to filing taxes. There is the Form 1099 series, which reports various types of income and earnings. There is the Form 1040, which lists everything the IRS needs to know about income, losses, deductions, and other information.
Perhaps you’ve seen the stories about Millennials making six-figure gig salaries. That’s good work for a lucky handful of freelancers, but the truth is, most people powering the gig economy earn far less than that lofty amount.
Any time you earn any amount of income that doesn’t fall under the “wages and salaries” category, the IRS wants to know about it. The 1099 form series reports various types of non-employment income to the IRS, such as contract payment (1099-MISC or 1099-NEC) or interest income (1099-INT).