What are the basic FEES for trading stocks and what Taxes are involved?

Question

I've been preparing to start buying and selling stocks but I've never actually done it before and I want to know as much as possible before I start. My basic questions are:

1. What is the normal transaction fee to buy stock and is it the same fee regardless of how many shares I buy?

2. What is the fee to sell my stock?

3. If I start out investing a total of $1000 to buy shares and then I sell them and make a profit of $500. How much taxes do I have to pay on the profits?

Thanks

Answer 1

If you are looking at discount brokerage firms, the normal transaction fee to buy a stock can range from $0-$12 (Zecco offers 10 free trades per month if you deposit $2500+).  Big name brokers like Etrade, TD Ameritrade, and Schwab tend to charge more.  Deep discount brokerage firms charge less, but you get what you pay for.  Deep discount brokerage firms like Zecco, SogoTrade, and Interactive Brokers are not recommended for beginners since they have hard to use websites and poor customer service.  I currently use Firstrade, they are $6.95 per trade.  Therefore, the fee to sell my stock would be $6.95 as well.  As for your tax question, tax rates vary depending on what bracket you are and also how long you held the stock.  A short term trade (under 1 year) will probably be taxed around 30%.  A long term trade (over 1 year) will probably be taxed around 15%.

Answer 2

Commissions (fees) vary among brokerage firms, they will range from $4 up to $15 for each transactions, and when you sell you will be charged another commission (fee).

Taxes will vary based on your total gross income.  You must add you gains to your income and will be taxed accordingly.

Trade well,

Answer 3

Scottrade offers trades for $7. So if you buy 10 shares of XYZ for 10 dollars---it would cost you $107. When you sell your 10 shares--it will cost you $ 7. Typically if you sell your stock in less than a year, the tax could be typically around 25% but if you hold it for more than one year--it would be 15% tax. Hope this helps.