Day Trading Tax Estimator

How day trading taxes work

Net short-term capital gains are taxed as ordinary income at your regular bracket, so a gain sits on top of your other income. This calculator works out the federal tax with the gain and without it, using the 2026 brackets and standard deduction, and shows the difference.

If your modified adjusted gross income is over $200,000 ($250,000 married filing jointly, $125,000 married filing separately), a 3.8% net investment income tax applies to the lesser of your investment income or the excess. A net capital loss offsets up to $3,000 of other income ($1,500 if married filing separately), and the rest carries forward.

Wash sales can change the figures you enter. If you buy substantially identical stock, or a contract or option to buy it, within 30 days before or after a sale at a loss, the loss is disallowed for now and added to the cost of the new shares. Traders who qualify and make a timely Section 475(f) election use mark-to-market accounting, which removes the wash sale rule and the capital loss limit. The IRS does not allow late elections, and the deadline is the due date of the prior year's return, without extensions.

Federal tax on the gain = tax(income with gain − deduction) − tax(income without gain − deduction). NIIT = 3.8% × min(net gain, income − threshold).

Worked example

A single filer with $80,000 of other income and a $40,000 net gain takes the $16,100 standard deduction. Taxable income is $103,900 with the gain, for $17,570 of tax, and $63,900 without it, for $8,770.

The gain costs $8,800 in federal tax, or 22%. Income of $120,000 is under the $200,000 threshold, so there is no net investment income tax. A state tax comes on top at whatever rate you enter.

What the result does not account for

• Long-term gains, qualified dividends, credits, the alternative minimum tax and the qualified business income deduction.
• Wash sale adjustments, so enter gains and losses as your broker reports them after those adjustments.
• State rules, because this applies one flat state rate that you type. It also does not deduct state tax from the federal figure.
• Estimated tax payments and penalties, and any carryover from earlier years.
• Section 475(f) treatment, which reports gains and losses differently.

Rules and sources

We checked these rules on November 2, 2026 against IRS Rev. Proc. 2025-32, IRS Topic 409, IRS Topic 559, IRS Topic 429 and IRS Publication 550.

Frequently asked questions