The tax deadline is around the corner. Cheddar breaks down tips for first-time investors this tax season.

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Tax Tips for First-Time Investors

this segment is brought to you by intuit TurboTax live intuit TurboTax live experts are ready to help you with your unique tax situation and get you the best tax outcome. That's right. If you're new to investing, you know, there's a lot to learn but also a lot to gain investing allows you to take control of your own financial future to grow your money, even plan a bit for retirement. But investing can also have an impact on your taxes. So today we are going to be breaking down what first time investors should know about their taxes as well as the world of investments. Alright, so you invested in the market for the first time this year? What do you expect? Well, if you are new to investing, know that you will get tax forms from any taxable event similar to what you get from an employer. But what makes an event taxable versus nontaxable? Well, the sale of a security and the sale of Cryptocurrency. Those are considered taxable events, dividends or interest are also common, taxable events, dividends in 401 Ks. Or Roth iras those are not considered a taxable event by the I. R. S. That's right. And another common question for new investors is surrounding games. We all know the stock market has its ups, it has its downs. So how are taxes assessed on realized gains? Well, if you buy a stock and the value goes up, you don't have to pay taxes on those gains every year. When the stock goes down in value, you won't have to pay taxes until you sell your stock basically, you won't get taxed until you sell your stock. There is also a difference between short and long, long term capital gains, Your short term gains are taxed when you sell them or and have sold them held them for 12 months or less. And while long term gains are taxed when you sell or had them for over a year, the short term gain tax rate is based on your income tax bracket, while the long term are not tied to your income brackets And something to keep in mind as a new investor is the possibility of capital losses. If it happens to you in this very unpredictable market, you can actually use it to offset your income if you have more losses than gains in a particular year, you can actually take up to $3,000 of those losses and apply it against your income to reduce your overall income. Another call out for first time investors is understanding net investment income tax, there is an extra tax of 3.8% on net investment income if you are above certain thresholds. Now, these thresholds are dependent on several factors like if you are single or married, filed jointly and how much your household income actually is. And so with all that in mind, how should you keep track of your own investment records to best prepare? Well, most investment apps and modern day brokerages are able to keep your transaction records, but it can't hurt to have a backup log of what you've purchased on this. You can keep track of things like the date of purchase, the number of shares cost basis, even commission. Okay. Intuit TurboTax. Live experts can answer all of your tax questions or can even take care of the whole filing process for you. You do your thing and they've got your taxes.