Trader Tax Forms

Trader income tax preparation can be overwhelming for the first-time filer. Even many experienced traders prefer to entrust their federal income tax return to Traders Accounting’s tax professionals rather than battle it alone. You know trading; we know trader taxes. It’s just common sense.

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Trade as a Business Entity and Reap the Benefits

The Internal Revenue Service has two tax codes: one for businesses, the other for individuals. Because businesses grow money both by paying taxes and employing other taxpayers, they are rewarded and encouraged through a benevolent tax code. Individuals, however, are treated far more harshly by routine tax hikes and diminishing deductions.

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Mark-to-Market Accounting

One of the most important decisions you will make as a trader is whether to elect the mark-to-market (MTM) accounting method. Although MTM is only available to traders, not investors, and does offer some significant tax advantages, it is not right for everyone. What makes this decision so important is that once you select MTM, … Read more

Limited Liability Company

Jim Forrester, CPA The limited liability company, or LLC, is often referred to as a hybrid legal entity because it attempts to combine the advantages and minimize the disadvantages of the sole proprietorship/partnership on the one hand and the corporation on the other. Although LLCs have been popular throughout Europe and South America for more … Read more

Don’t Be Hung Out to Dry By Wash Sales

Jim Forrester, CPA The Internal Revenue Service loves to tax capital gains, but they are just as diligent to disallow capital losses that might offset those lucrative cash cows. Case in point: the wash rule. The wash rule prohibits traders and investors from claiming a capital loss if they buy replacement stock 30 days before … Read more

Claim and Defend Your Trader Status

Just because you call yourself a securities trader doesn’t make you one in the eyes of the Internal Revenue Service. In fact, Uncle Sam is predisposed to consider you merely an investor, and thus deny you more favorable tax status, unless you meet a number of tests that are frustratingly open to interpretation. That’s right: … Read more