The stock market is in a bubble, but what’s not to love?
You can make a lot of money from it, and it’s a great place to park your cash and save for retirement.
But the downside is that you’ll have to pay taxes on the profit.
In fact, the average Australian has to pay about $4,000 to $5,000 a year in taxes on a stock purchase, according to a recent report from the Tax Foundation.
The reason is simple: you’ll be taxed on the net income generated from the sale of your shares, not the profit you make.
So, if you buy a share for $5 at the market price of $15, you’ll pay $1,000 in taxes.
That’s because the taxable amount of the sale is $1.5 million, and the taxable profit is $4 million.
That means the net tax on the sale comes out to about $1 per share, not $4 per share.
You may think this is a small number, but when you consider the fact that most stock investors do not make a huge amount of money by buying stocks, and that they don’t pay taxes, it’s not so small.
To find out how much your shares will make you, I used the same data I used in my previous article, which looked at the average taxable amount on a single share of a stock from 1995 to 2018.
To make sure you don’t miss out, here’s how to calculate your share price: share price x number of shares = amount you can buy from stock exchange.
You’ll need to do the math on your own, but you’ll probably need to take into account your taxable amount, which you can get a copy of here.
The tax paid is: share value x number = amount your stock will be worth If you don, in fact, sell your stock, you can take advantage of the tax deduction you can claim for it.
For example, if I bought $15 worth of shares in March 2019 for $1 each, my taxable amount would be $1 million.
I could then claim a $1 tax deduction for the share price, which would allow me to claim an effective tax rate of just 15 per cent, or $0.0025 per share (plus a $5 tax credit, if applicable).
This would leave me with $1 in taxable profit on my share.
The difference between my taxable profit and the tax it would take to collect would be the difference between the taxable income I made from the purchase of the shares and the effective tax it will take to get my tax deduction.
Here’s how much I would have paid in taxes: $1 = $1 + 15 per cnt.
= $3,400 per share In other words, I would only have paid $3.400 in taxes for my $15 stock purchase.
And because I didn’t pay the tax I would owe, I wouldn’t have paid any tax at all.
If you decide to buy shares at a stock exchange, I recommend you pay as much tax as you can afford.
If the stock price is lower than you think, it may be worth it to wait for the market to rise.
But if you decide you need to sell your shares at the stock exchange soon, it can be hard to determine what your stock price will be at that point.
But just because the stock isn’t as valuable as you think it will, doesn’t mean you shouldn’t sell them if it doesn’t have the market going for it, even if you don’st know exactly what you’re going to get.