Put your capital in an entity!!! Traders Accounting advises clients on the most advantageous entity structure for your trading activities. If you are an investor or part-time trader, and are frustrated with the tax code's restriction on deducting investor expenses, here is your answer.
(1) Establish a legal entity, such as an LLC or corporation in your state of choice. Typically, you will register it in your home state. There are some individuals who choose to use a state such as Nevada that does not have a state corporate income tax. After completing the IRS SS-4 form, you will be issued an Employer Identification Number (EIN). That is the identifying number that the IRS uses for your new business. The next step is to transfer your brokerage account, or some portion of it, out of your personal social security number, and into the new EIN.
(2) At this point, business can begin and all "ordinary and necessary" business expenses incurred in your business of money management are 100% deductible. Of course, meal and entertainment expenses are subject to a 50% limit. It is very exciting to offset trading gains with expenses you are currently incurring, such as computers, training, subscriptions, meals with fellow traders, and internet access.
Join Traders Accounting at the International Traders Expo in New York!
We will be holding three special events in addition to a full booth setup for you to visit us at this Expo.
Event 1: Five Ways Traders Throw Money Away
Every trader knows there is one critical aspect to trading that can't be ignored – it is easier to trade with more money than with less. The concept may sound simple enough, but most traders are unaware of the available tools that will impact trading capital. In this presentation Traders Accounting present five areas that have a direct impact on trading cash flow.
Traders Accounting engaged an independent research firm to investigate the trends outlined in this study. In a report from the Wall Street Journal, Drew Niv, Chief Executive of FXCM stated, “If 15% of day traders are profitable, I'd be surprised.” During this fact filled presentation based on market research see the statistics on:
Event 3: Increase Cash Flow With Tax Efficient Trading
Part of the survival for any successful trader is cash flow management. The largest expense a trader has whether the trader makes or loses money is taxes. Every dollar we spend on taxes means we have one less dollar to trade with. With this in mind it is obvious that as traders we have the obligation to do everything possible to keep as much money in our brokerage accounts as possible.
Jim will teach us about increasing our cash flow through Trading as a Business. In his presentation he will lead us through an interactive workshop on:
Trading as a sole proprietor
o The IRS “special rules” surrounding “Traders Status”
o The recent Frank Chen Tax Court Case, and what it means to all traders
The advantages and disadvantages of trading as a formalized business—What type trader would use a formal business?
o Partnerships
o LLC's
o Corporations
Is there a cookie cutter approach to tax savings for a trader?
The taxation of 1256 contracts
o The difference
o What types of trading business would fit in this category
Not Just a Business, A Properly Structured Company
As part of our regular process of creating trading business' for clients Traders Accounting provides four one hour each business consulting sessions. During these sessions we walk you through all of the steps necessary to ensure your company is structured, funded, and setup correctly to provide the protection you desire and deserve. Many of the problems that people find themselves in, like the one featured in the above article, can easily be avoided when you have a professional service, like ours, working with you. We don't just provide you with "cookie cutter" -- forms, like Legal Zoom, nor do we just send you the documents and leave you to the details on your own like most of our competitors. Traders Accounting wants to go the whole distance in making sure your trading company is complete and correct every step of the process.
Using a Traders Accounting bookkeeper, you will receive quarterly financial statements based on the trading information you provide to us. Although you will receive financial statements quarterly, your bookkeeper actually reviews your account every month to keep it current with the trader tax law changes and updates that can impact your business.
Call Sara for more Information: 1-800-938-9513 x208
Traders Accounting provides this free Newsletter as a service to our clients and subscribers. The publication is sent out twice each month on average and is intended to keep Traders aware of changes to the Tax code, educational opportunities, and general news that pertains to the business of trading.
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