Wash Sale – A wash sale occurs when you sell or trade stock or securities at a loss and within 30 days before or after the sale you: (1) buy substantially identical stock or securities, (2) acquire substantially identical stock or securities in a fully taxable trade, or (3) acquire a contract or option to buy substantially identical stock or securities. You cannot deduct losses from sales or trades of stock or securities in a wash sale.

Withholding – If you are an employee, your employer probably withholds income tax from your pay. Other taxes withheld include Social Security tax and Medicare tax. How much is withheld from your pay depends on your income and the information you provided on Form W-4, Employee’s Withholding Allowance Certificate. Tax may also be withheld from certain other income, including pensions, bonuses, commissions, and gambling winnings. In each case, the income tax amount withheld is paid to the Internal Revenue Service in your name.