Confused about calculating short term capital gains taxes on common stock - how are disallowed losses handled?

Thanks for the explanation! So if I understand correctly, if I have wash sales (which I definitely do), the net gain number my broker is showing might not be accurate for tax purposes? Is there a way to figure out what my actual taxable amount will be?

That's right - the net gain number might not be accurate yet. Your broker will calculate everything correctly when they issue your 1099-B in January/February, but until then, the gain/loss numbers you see might not account for all wash sale adjustments. If you want to calculate it yourself, you'd need to identify all wash sales, temporarily remove those losses, and then add them to the cost basis of the replacement shares you purchased. It can get complex quickly if you have multiple trades in the same security. Most tax software can handle this when you import your 1099-B, so I'd recommend waiting for that unless you need a precise estimate now.

Does it work with all brokers? I'm using Fidelity and their reporting is confusing me. Also, can it help with figuring out if I should sell some losing positions before year-end to offset some of my gains?

I'm skeptical about using third-party services for tax stuff. How secure is it? I'm not comfortable uploading my financial statements to some random website.

It works with all the major brokers including Fidelity. I used it with Schwab and TD Ameritrade statements without any issues. And yes, it can definitely help with tax-loss harvesting strategies - it'll show you potential tax savings if you sell certain positions. Regarding security, they use bank-level encryption and don't store your actual documents after processing. I had the same concern initially, but after researching their security practices I felt comfortable with it. They're also used by tax professionals, which gave me more confidence. The analysis is automated so your data isn't being reviewed by people.

How exactly does this work? Do they just call the IRS for you? Couldn't I just do that myself? Not sure I understand what I'm paying for here.

This sounds like a scam. Why would I pay someone else to call the IRS for me? And how would they even know what questions I need answered about my specific tax situation?

They don't just call for you - they navigate the complex IRS phone menu system and wait on hold (which can be hours sometimes), then when they actually reach a human agent, they conference you in. You speak directly with the IRS agent yourself to ask your specific questions. They don't know your tax questions or situation at all - they're just getting you connected to an actual IRS person. I was skeptical too until I tried it. Last February I spent over 4 hours on multiple calls trying to reach someone at the IRS, getting disconnected or told to call back later. With Claimyr I was talking to an agent in under 30 minutes without having to deal with the hold time myself.

That's a good point about the tax rates! All my trades this year have been held less than a year, so I know I'm stuck with the higher short-term rates this time. Do you have any suggestions for tax planning with my current situation? Is there anything I should be doing before year-end to optimize my tax situation?

For your current situation, you might want to review your portfolio for any losing positions that you're not confident about anymore. Selling those before December 31st would allow you to harvest those losses to offset some of your gains. Just be careful of the wash sale rule - don't buy back the same or substantially identical securities within 30 days. Also, make sure you're setting aside enough for estimated tax payments. With $66,800 in gains, you could be looking at a significant tax bill, and if you haven't been making quarterly estimated payments, you might face underpayment penalties. Some people are surprised when they realize capital gains don't have automatic withholding like paychecks do.

This is mostly right but some brokers' 1099-Bs can still be confusing. My Etrade one last year showed the wash sales but didn't explain how they affected my final numbers. Had to spend hours figuring out what was happening.