Do I pay taxes on stocks?
In a regular US brokerage account, yes: on profits when you sell and on dividends when they are paid. Not on unrealised gains while you hold. Retirement accounts defer or eliminate these taxes.
Yes, in two situations. When you sell a stock for more than you paid, the profit is a capital gain and is taxed. And when a company pays you a dividend, that cash is taxed in the year you receive it, whether you spend it or reinvest it. Both apply to a standard, taxable brokerage account in the US.
You do not pay tax on a stock simply going up. If you bought at $50 and it is now $150, you owe nothing until you sell. That is one reason long-term holding is tax-efficient: the gain compounds untaxed for as long as you leave it alone.
How much depends on how long you held. Sell within a year and the gain is taxed as ordinary income, at the same rates as your salary. Hold over a year and it is a long-term capital gain, taxed at 0, 15 or 20 percent depending on your income, with most people at 15. Qualified dividends get the same favourable rates.
Retirement accounts change the picture. In a traditional IRA or 401(k), no tax is due on gains or dividends until you withdraw in retirement. In a Roth, no tax is due at all on qualified withdrawals. Your broker sends a 1099 form each year summarising what is taxable in a regular account.
Informational only, not financial advice. Updated September 4, 2026.
Get the free market brief
Top stories and analysis, summarized. No spam, unsubscribe anytime.