Learning Day Trading

When day trading stocks how can I minimize or avoid unwanted capital gains taxes?

I am starting out day trading stocks and want to minimize the taxes I will have to pay. Does anybody have good tips or tricks to doing this? I will not be holding them for over a year. Also any good programs or websites I might want to use. I use Scottrade currently but want something for charting.

Public Comments

1. There is no way to avoid capital gains taxes other than having no capital gains.
2. there's really nothing you can do. if you're day-trading your capital gains are short-term and get taxed as ordinary income. the table in this article shows the rates for CY 2009; 35% max. http://www.moneybluebook.com/2009-federal-income-tax-brackets-official-irs-tax-rates/
3. No taxes within a Roth IRA account. But it is difficult to day trade within one.
4. I do not know about US tax laws but here in Canada all capital losses are dependable against all capital gains. If this is not so in the USA, then consider setting up a company in another country. Loan money to the company at normal rates. Use the company to buy and sell stock. In my opinion you would only pay US taxes when the company paid you a dividend.
5. If you are day trading the biggest problem you will have is making money. I would focus on that first. If you don't get washed out of the market in the first 6 month and you can actually replace your job, contact a tax consultant, because now a large part of your money that is spent is now tax deductible. Interesting article about Warren Buffett makes $46 million a year is taxed at 17.7% and his secretary who makes $60,000 a year is taxed at 30%. Good Luck,
6. I'm not a day trader ( learned my lesson on that crap many years ago) but worrying about capital gains is a waste of time. You want capital gains. That means your making money. Making money is the name of the game and you need to pay the taxes on your earnings. I love paying a lot of taxes because that means I had a great year. Money made in the first part of the year let's you keep and reinvest the longest because you will not pay taxes until April of the following year on these earnings but anytime is a good time for making money.
7. If you have at least $25K on your brokerage account then you are classified as a pattern or full time trader and you can deduct trading commissions as regular business expense. That's the most you can do. You will always have to pay taxes whether you sell ice cream cones or trade stocks. Also you pay less taxes if you hold stocks long term. The more time that passes the less the percentage. I don't remember the exact numbers right now but you could check on sec.gov . So traders basically pay more tax % than long term investors.