Taxes are definitely something we cannot get away from whether it is in the forex market or our wages. The creation of the forex news bulletin is to remind you that you will have to pay taxes on your trades based on where you live. In certain countries, there are such significant taxes charged you might want to look for an offshore broker just to save any profit you make. Three countries will be mentioned here regarding taxes, and if you are unable to find out about all 190 countries consider asking your accountant. Additionally, find out what your country requires for starting a forex account.
Forex News on Taxes for Profit
In the U.S. you are taxed for any trades you make whether it is in the forex market or stock market. Even IRAs and other savings accounts might be taxed based on the money you have saved up and where it is. For the specific percentage of tax speak with an accountant. In the U.S. different states might require different percentages. You also have the federal tax to contend with. Most states and federal taxes will consider any profit in the forex market as income.
Forex news states that your tax bracket determines the amount of tax charged on your forex trades. Someone in the 14% tax bracket is charged more than a person in a 10% tax bracket.
According to data found online, if you live or have a broker account in Japan you will pay 67.5%. The information was found on a money making experts forum. The forum post was from a U.K. individual regarding a post he had read from a friend in Japan. If this information is true, then forex investments in Japan are very expensive for the average investor. You lose more than half your profits trading in Japan and reporting it on your taxes.
The U.K. is yet another country to mention due to the significant difference of both the U.S. and Japan. In the U.K. you can trade tax free as long as you have a spread betting account. It is an account where you place trades like you would in the stock market. You do not buy or sell anything. Instead, you place a bet on whether it will go up or down. You need to master traditional forex trading first before going for the spread betting option.
Forex News: The U.K. Tax Situation
Utilising the same forum as mentioned in the above section, forex news tells us that the U.K. will not charge taxes if you use spread betting instead of traditional forex trading. Most beginners are looking for the traditional forex concept. If you trade regular forex currency pairs and do not use spread betting, you will pay taxes. You will be charged at the “capital gains rate.” This is like the profit of stocks and shares where you invest in the traditional way.
Further forex news states you have only one tax free method in the U.K., but you are still charged the pip spread by the broker. The pip spread is the broker fee for the trades you place.