Results 1 to 5 of 5

Thread: Tax tips for traders - got one?

  1. #1
    Join Date
    Feb 2008
    Posts
    538

    Default Tax tips for traders - got one?

    Taxes are always a headache for me.. how about you? Commiserate and share what's working here - it would be great to hear what works best for you re taxtime, and simplifying returns....

    -ken

  2. #2
    Join Date
    Mar 2008
    Posts
    6

    Default Trading as your own business

    I spent a year and a half investigating this so if you have any questions about it I might be able to answer them. I am not an accountant or CPA...just someone who went through the process...

  3. #3
    Join Date
    Mar 2008
    Posts
    2

    Default

    Hello Rob,

    I just started today on this topic. Glad I found your thread. Do you need to incorporate and then trade through the business name? I will highly appreciate if you could guide us in this matter.

  4. #4
    Join Date
    Mar 2008
    Posts
    3

    Talking Forming LLC's/ Tax Tips For Traders

    There are advantages to forming your LLC as a "Chapter S" LLC-Uncle Sam won't tax you TWICE. Also look into incorporating yourself in the State of Nevada! You would not believe how lax and lenient the tax codes for corporations in Nevada are! What a country! A firm for a small fee will act as your "agent" and all your legal mailings can go to their address (there shouldn't be much "legal mailings" if you're just trading!)
    When you name your LLC you will get a TAX EIN number that is for your LLC alone and separate from your personal SSN #. You would open your brokerage/trading account under the name of your LLC and use your new Tax EIN number for tax purposes. Its that simple. Of course you could choose to open an "Individual Account" and just use your SSN # and at the end of the year file as "Self Employed" or "Daytrader". You will not be paying into the Social Security program..all of your income will be taxed as "Capital Gains/Losses" on your 1040 Form under "Schedule D." You do not need to be a licensed professional or form an LLC to daytrade from an "Individual Account." Lastly, asset protection. 94% of all the lawsuits filed IN THE WORLD originate right here in the United States. A great advanatge to having an LLC is first you create a business checking account with your company name and new TAX EIN number. You establish a separate line of credit with your LLC that has nothing to do with your "personal credit score"Secondly, if you own a house, rental property, a car, a boat, CD's, IRA's etc.-put THEM ALL in your LLC. If anyone trips and falls on the curb outside your house and wants to sue you and take your house-it's protected! Anything that is in your LLC cannot be taken from you in a peronsal lawsuit. Keep a monthly record of your trades and at year end find a competent CPA firm to do your tax work. A firm that does financial planning, and understands "corporate and LLC" tax filings, and trading stocks/options/ futures-whatever you choose to trade. Check further..in an LLC with you as the sole member (Chapter S ) you could make $100,000 a year and possibly "pay yourself" a salary of only $25,000 and claim the rest as "dividends" that you intend to "reinvest" in YOUR COMPANY! You can also "lease" the property you reside in where you trade and do business from for some additional tax breaks! DEFINETLY look into the tax advanatges of setting up your corporation in Nevada! Best advice for trading well...stay with DTU!!!

  5. #5
    Join Date
    Feb 2008
    Posts
    538

    Default

    Interesting tips, thanks for sharing. (reminder - any URLs will be deleted; no commercial urls are allowed on this site). It's a good idea to check with licensed professionals to get ideas for making the most of your business and trading approaches that are legal and work.

    Ken

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •