TraderStatus.com

TraderStatus

Looking for tax deductions?

This website is targeted to the businesses of trading stocks and trading Section 1256 futures. But there is also a lot of additional content for other business types, their owners and other individuals who file with the Internal Revenue Service.  Taxpayers may also like to visit TheTaxWiki for other timely information.

There is one reason to claim trader status on one’s tax return.  To lower your capital gain tax   After one claims trader status, there are a number of reasons to optionally make a decision to elect mark-to-market (M2M) accounting.

Such a tax election is not to be made lightly, as it can have significant and irreparable effect on your income taxes.  Unfortunately, an amazing number of taxpayers and even their professional tax advisors make or try to make one or more of the M2M elections foolishly or improperly.

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Here at TraderStatus.com™ we will bring together in one place much of the information necessary to help you survive unnecessarily high short-term capital gain taxes, self-employment taxes, Affordable Care (Obamacare) taxes, and state and federal income taxes. To accomplish this sometimes a separate trading entity, such as an LLC or corporation, is the answer. But just as often we avoid the red tape and costs of forming an entity, when it is not cost effective in a particular situation.

Investors and traders in financial instruments, including futures, may incur substantial costs with online fees, chat rooms, commissions, real-time data-feeds, computer equipment and so on. The Internal Revenue Service, left to its own devices does not treat most of these taxpayers very fairly when it comes to deducting such expenses. While they do provide some information in IRS publications and instructions, they then sometimes audit taxpayers with the goal of disallowing the tax favored positions taken.

Unfortunately the hard facts are that, when it comes to traders in financial instruments or futures, many tax advisers still have no clue when there is a Trader Status issue to look up, let alone having the practical hands-on experience necessary to be aware of the hidden tricks and traps out there.

Help is out there for those qualifying taxpayers whom are active enough to file with the IRS as a TraderStatus™Taxpayer. Under Trader Status an electing daytrader may deduct all of his ordinary and necessary expenses. Taxpayers filing with Trader Status do not itemize those expenses on Schedule A (but they may take the “standard deduction” in addition to all of their “trader status” expense deductions). 

I am a CPA, so you know that i have to have this message: the information on this website (or the related links found below and elsewhere on this site) are for general informational purposes only. Nothing on this or these sites should be taken as legal advice and/or tax advice by anyone, including any individual matter or situation. This information is not intended to create, and receipt or viewing does not constitute, an attorney-client relationship or a CPA-client relationship.

To access our old-school, original, non-mobile friendly website, click here.

For an alternative link to access our old-school, original, non-mobile friendly website, click here.

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