I read some articles on the internet but I am still confused. None of the articles seem to give me an answer that I am able to understand.
As far as I understand, I can either apply the Standard Deduction ($6500 as a single person for 2018) or the Itemized deduction (variable amount if I have uninsured medical expenses etc), whichever is greater - to my taxable income.
Now, say that I was trading in the stock market, and my (short/long term) gains + losses for the year equal negative $1000. Based on this I have 2 questions:
- Does my $1000 loss in stocks further reduce my taxable income in addition to the Standard or Itemized deduction.
- OR does it become a part of the Itemized deduction, and only matters if adding that 1000 to the total Itemized deduction amount makes it greater the Standard Deduction amount?