Taxation on day trading affects how much of your profits you keep and how you report losses at tax time.

Taxation on day trading affects how much of your profits you keep and how you report losses at tax time. If you actively buy and sell securities within the same day, most profits are typically taxed as short-term capital gains, often at your ordinary income rates. Understanding the difference between short-term and long-term treatment, the wash-sale rule on disallowed losses, and whether you qualify for trader tax status or a mark-to-market election can significantly change your bill. Clear records are essential: every trade's date, cost, proceeds, and fees. Many traders can deduct platform costs, data subscriptions, and home office expenses when they meet eligibility rules. Accurate reporting usually means reconciling 1099 forms with your broker statements and using the correct schedules and forms for gains, losses, and elections. This page explains the fundamentals, common pitfalls, and planning tips so you can approach day trading taxes with confidence. While we cover general best practices, always confirm details with a qualified tax professional for your jurisdiction.

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