I’m so glad that 2020 was full of legendary gains for many investors (including new ones). I’m looking at all you newly minted millionaires who threw money into BTC and TSLA at the start of 2020.

For my new investors, I just wanted to give a gentle reminder that you have to pay capital gains taxes on the stock profits unless you have it in a special retirement, health, or education account.

For example, if I bought APPL for 1,000. And sold it for $11,000, I would owe taxes on 10,000.

How much?

It depends on how long you hold the stock for —

👉 Long term capital gains is >1 year

👉 Short term capital gains is <1 year

So make sure you save an appropriate amount to pay taxes! Don’t get surprised when you owe a few thousand or more at the end of the year.

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*This post is not investment advice and should be educational only.