A Tax Guide for Sole Proprietorship Traders
When you make part or all of your income from day trading, you have several different options for categorizing and conducting your enterprise. While business entities such as LLCs and C-Corporations are often the smartest choices as far as tax benefits go, many traders prefer to trade as a sole proprietorship.
Sole traders or proprietorships are popular because they are an easier type of business to establish, you retain full control, and tax preparation is less complicated. If you’re keeping your trading enterprise small and decide not to incorporate, there are a few things you’ll need to know about filing taxes as a sole trader.