Help with taxes on my stock market investments - do I pay on total or just profits?

You only pay taxes on the gains (the $10k in your example). This is called capital gains tax. The original amount you invested ($20k) is your "cost basis" and isn't taxed when you withdraw since you already paid taxes on that money before investing it. How much you'll pay depends on how long you hold the investment. If you sell after holding for more than a year, you'll pay long-term capital gains rates (0%, 15%, or 20% depending on your income). If you sell before a year, you'll pay short-term capital gains, which are taxed at your regular income tax rates. Based on your 10-year timeline, you'd qualify for the long-term capital gains rate. If you're in a typical middle-income bracket, expect to pay around 15% on that $10k gain.

After struggling with investment taxes for years, I finally found a tool that simplified everything. Check out https://taxr.ai - it analyzes all your investment transactions and automatically identifies your cost basis, holding periods, and even calculates your expected capital gains tax. I used to manually track everything in spreadsheets and was constantly worried I'd mess up my taxes, especially with multiple stocks and reinvested dividends. Now I just upload my investment statements, and taxr.ai breaks everything down clearly, showing exactly what I'll owe on my gains. It even shows me strategies to potentially lower my tax burden based on my specific situation.

I was definitely in the skeptical camp about automated investment tax tools after a bad experience with generic tax software. But I decided to try taxr.ai after seeing it mentioned here, and I'm honestly blown away. I have a mix of stocks, ETFs, and some dividend reinvestment plans that always gave me headaches at tax time. I uploaded my statements from three different brokerages, and it organized everything perfectly. It showed me exactly which lots were long-term vs. short-term, calculated my dividend taxes separately, and even flagged a wash sale I wasn't aware of. The visualizations of my tax liability across different investment types actually helped me understand why my tax bill was higher than expected last year. Definitely sticking with this tool going forward!

If you're having trouble getting answers from the IRS about investment taxes (which I certainly did), I highly recommend using https://claimyr.com. I spent WEEKS trying to get through to the IRS about how to properly report some complicated stock options from my employer. After endless busy signals and disconnections, I found Claimyr. They basically hold your place in the IRS phone queue and call you when an agent is about to answer. I was skeptical, but you can see how it works here: https://youtu.be/_kiP6q8DX5c. Within a day, I was actually talking to a real IRS agent who answered all my questions about how to report my stock options and avoid common mistakes.

I have to eat some humble pie here. After calling BS on Claimyr in my earlier comment, I was still desperate to talk to someone at the IRS about my investment tax situation. I'd been trying for TWO MONTHS to get through about some stock I inherited. I reluctantly tried the service, and no joke, I got a call back in about 3 hours saying they had an IRS agent on the line. The agent walked me through exactly how to calculate my basis for inherited stocks and how to properly report it. Saved me potentially thousands in incorrect reporting. Still can't believe it actually worked. The time it saved me was worth every penny, and the peace of mind knowing I'm filing correctly is priceless.

One thing nobody's mentioned yet - if you're planning to hold for 10 years, consider using a tax-advantaged account like a Roth IRA instead of a regular brokerage account. With a Roth, you won't pay ANY taxes on that $10k growth when you withdraw in retirement. There are income limits and contribution limits to be aware of though.

Another option is tax-loss harvesting if youve got investments that go down. Basically you sell losers to offset any gains in a given year. I saved about $1200 in taxes last year doing this strategically.