aka why its awesome to be a trader in Texas (even if you are surrounded by ...)
Upcoming the rest of five-part blog series: Tax Battle Of The States
New York Vs. Florida;
Midwest Vs. Southeast Top 10 States;
New Jersey, Washington & Massachusetts;
Nevada, New Hampshire & District Of Columbia
As a general rule, if you trade futures and become a member of an exchange, you are subject to Self-Employment Tax on the income.
I have recently come across the opinion that if you have an "Electronic Corporate Membership" that is not the case. Has anyone else heard, or acted upon, this?
Broker: Primary Advantage Futures. Also ED&F and Tradestation
Trading: Primarily Energy but also a little ES, GE, GC, SI & Bitcoin
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This used to be a bad thing but with the implementation of the 'investment tax' I believe there are ways that paying SE can reduce your investment tax bill but allow you to deduct pension contributions.
Sorry can't help.
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If one owns and has read Robert Green's "The Tax Guide for Traders" from a number of years ago what is the additional benefit, if any, of buying "Green's 2016 Trader Tax Guide"?
I am moving to Calgary this December and i trade American Futures (ES, CL, 6E)as well. Can you share your experience with me regarding choosing an American Broker and the tax formalities you need to fulfill? I have contacted Global Futures and IB. Global has higher than normal commissions and IB's data is not the best as i use tick and range charts.
Thanks
The following user says Thank You to punitsomaya for this post:
We would be more than happy to help. If you are moving to Canada as a "landed immigrant" status I assume you will pay Canadian taxes via the 1099 you will receive from your FCM. If you are moving to Canada without a status then you would have to pay taxes though your native country. Either way, you have to declare it somewhere.
If you gain contact with us we would be more than happy to provide favorable terms to your trading.
I hope this helps.
Thanks,
Matt Z
Optimus Futures
There is a substantial risk of loss in futures trading. Past performance is not indicative of future results.
Trading futures and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. You may lose more than your initial investment. All posts are opinions and do not claim to be facts. Please conduct your own due diligence. Use only Risk capital when trading Futures.
1 800 771 6748 local 561 367 8686 email support@OptimusFutures.com
The following user says Thank You to mattz for this post:
You most welcome. Looking forward to hearing from you.
Matt Z
Optimus Futures
There is a substantial risk of loss in futures trading. Past performance is not indicative of future results.
Trading futures and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. You may lose more than your initial investment. All posts are opinions and do not claim to be facts. Please conduct your own due diligence. Use only Risk capital when trading Futures.
1 800 771 6748 local 561 367 8686 email support@OptimusFutures.com
Matt from Optimus is extremely helpful. I got so much credible information from him. I think what separates good brokers from excellent brokers is that personal interaction regarding your trading needs. I am giving my business to him and I highly recommend Matt to any futures traders out there.
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I have an old LLC that I stopped filing taxes for since I wasn't using it in the past but thought it could come into play for trading. Is it beneficial to put your income from trading in a LLC instead of just filing it with your regular taxes?
Site Administrator Swing Trader Data Scientist & DevOps
Manta, Ecuador
Experience: Advanced
Platform: My own custom solution
Trading: Emini Futures
Posts: 49,364 since Jun 2009
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Hi guys,
It is my pleasure to welcome Ryan Curran from Curran Unger LLP on Thursday, February 9th @ 4:30PM Eastern US.
The topic for this webinar is "Tax Topics for Traders", and bullet points include:
- Making the Mark to Market Election - Mechanics, Issues, and Implications
- Trader Tax Status - Tax Benefits of Qualifying as a Professional Trader
- How to Qualify for Trader Tax Status - Specifics and Possible Pitfalls
- Q&A for members
Do you still use them? I am out of the US and last year the new H&R Block "Block advisors" charged me insane fees.
If you could help me with an email contact (internal message). I would appreciate it.
In the United States you sign a form called W8 which is "Certificate of Foreign Status of Beneficial Owner for United
States Tax Withholding and Reporting (Individuals)" This means that you are not paying taxes in the USA rather it is your own individual obligation to pay it in your own country.
I believe this applies to all asset classes and if you are not a citizen or resident of other countries, they would have a similar form. You need to also ask your broker is there are any treaties between your country and the country of your brokerage where other laws may apply.
There is a substantial risk of loss in futures trading. Past performance is not indicative of future results.
Trading futures and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. You may lose more than your initial investment. All posts are opinions and do not claim to be facts. Please conduct your own due diligence. Use only Risk capital when trading Futures.
1 800 771 6748 local 561 367 8686 email support@OptimusFutures.com
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Broker: Primary Advantage Futures. Also ED&F and Tradestation
Trading: Primarily Energy but also a little ES, GE, GC, SI & Bitcoin
Posts: 3,795 since Dec 2013
Thanks: 3,088 given,
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Still very early to know what, or if anything, gets passed but this is an interesting discussion of the potential implications. Especially for business traders with entities.
Greentrader Tax / Forbes - Aug'17 :- How To Report Bitcoin Cash And Avoid IRS Trouble
Bitcoin holders were distributed one unit of Bitcoin Cash for each unit of Bitcoin, a separate financial instrument with a liquid market value. In the eyes of the IRS, that’s taxable income. Bitcoin holders should report the receipt of Bitcoin Cash on their 2017 income tax returns. It does not qualify as dividend income on Schedule B since a cryptocurrency is not a security. It’s also not considered interest income on a debt instrument or bank deposit.
Greentrader Tax / Forbes - Feb'17 :- If You Traded Bitcoin, You Should Report Capital Gains To The IRS
The IRS considers cryptocurrencies, including Bitcoin, to be “intangible property.” Investors and traders holding cryptocurrency as a capital asset should use capital gain or loss tax treatment on sales and exchanges, with the realization method. For example, if you buy Bitcoins with U.S. dollars and later sell them for U.S. dollars, a capital gain or loss needs to be reported on that transaction. An exchange of one cryptocurrency for another cryptocurrency is a taxable sale transaction, even though U.S. dollars are not involved in the transaction.
Site Administrator Swing Trader Data Scientist & DevOps
Manta, Ecuador
Experience: Advanced
Platform: My own custom solution
Trading: Emini Futures
Posts: 49,364 since Jun 2009
Thanks: 32,048 given,
96,623
received
Hi guys,
It is my pleasure to welcome back Ryan Curran CPA @ Curran Unger LLP for our 333rd webinar event on Tuesday, January 15th @ 4:30 PM Eastern US.
The title for the event is "Tax Topics for Traders in 2019", and bullet points include:
- Tax plan updates for 2018 Tax Year
- Qualified business income deduction
- Qualified opportunity zone tax deferrals
- Trader tax status - qualifications and implications
- Q&A session with Ryan Curran CPA, attend live to get your questions answered
I'm trying to figure out how I can get a bank to give me a loan against my trading profits? I own a few properties and would like to do a cash-out re-fi on them.
Right now I live in CA but I own two homes in FL that are rented out. I don't have any entities setup yet.
I have to report a lost for the year and I would like to know if I can deduct transaction costs for futures contracts. I do not see it on my 1099 from the tdameritrade so I am guessing I can’t. Thank
question about just Form 1256 - if you lost money last year, but made money this year trading only futures both years, do you get to subtract those losses from this year's gains? and you can do that for the preceding 3 years, right?
since you are allowed to carry loss forward you def can subtract your loss (Y17) against your gain (Y18). Even if you don't file on your loss you can always carry it forward forever.
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Being from Europe opening a margin account in the US for Futures trading I wonder whether providing the broker with a tax form like W8-BEN or similar would help me to avoid any deduction at source tax and any other tax within the US.
I heared about this 60/40 tax rule which seems to be relevant for Futures traders and I am not sure whether any W8-... form helps with regards to taxes in the US when it comes to gains from Futures trades. Or is there perhaps another attempt one should consider when having a US Futures broker without being a US citizen and without living in the US?
Broker: Primary Advantage Futures. Also ED&F and Tradestation
Trading: Primarily Energy but also a little ES, GE, GC, SI & Bitcoin
Posts: 3,795 since Dec 2013
Thanks: 3,088 given,
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Interesting article for all you full time traders out there. Discusses Trader Tax Status as well as the potential health insurance and retirement plan savings that you can achieve with an S-Corp. (Which is what I do, so I can vouch for its effectiveness - at least in my case!)*.
How To Structure A Trading Business For Significant Tax Savings by Robert Green / Green & Company / Green, Neuschwander & Manning
Read at GreenTraderTax or at Forbes
*Full Disclosure: Green, Neuschwander & Manning, LLC have been my accountant for approximately 10 years. If you would like to discuss in anyway feel free to message me. I have no financial arrangement with them, just a happy client spreading the good news
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I'm a tax professional that started trading futures last year. I'm blown away with how favorable the tax treatment is and can't image why anyone would trade any other type of security on a short term basis.
I read Mr. Greens book which provided some very good information for taxpayers and professionals alike. He recommends the practitioner making footnotes to provide details relating to "trader tax status".
Does anyone file a form 8275 disclosure statement to provide additional details? I just know in my experience filing a Sch C with expenses only is eventually going to be examined.
The following user says Thank You to booneyall for this post:
Broker: Primary Advantage Futures. Also ED&F and Tradestation
Trading: Primarily Energy but also a little ES, GE, GC, SI & Bitcoin
Posts: 3,795 since Dec 2013
Thanks: 3,088 given,
7,358
received
I'm a Green (Neuschwander & Manning) client and have been for many years. On my latest return they sent me they added 8 pages of Federal Statements which basically explains lots of details on the actual return. They also added 2 pages of Federal Supplemental Information which justifies my qualification as a "trader in commodities" and highlights the rules associated with that. Not sure if this is what they mean "footnotes" but I've always been impressed with their thoroughness.
Thinking about this some more, I've always assumed that those additional pages are included in my return but maybe they are just there for explanation/record. I think I will ask.
My return is large but it does not include an 8275.
According to the IRS
About Form 8275, Disclosure Statement
Taxpayers and tax return preparers use this form to disclose items or positions that are not otherwise adequately disclosed on a tax return to avoid certain penalties.
I'm not an accountant but my interpretation of that is that it's used to add information about things not on your tax form any where else, not to supply additional information for things that are.
The following 2 users say Thank You to SMCJB for this post:
Site Administrator Swing Trader Data Scientist & DevOps
Manta, Ecuador
Experience: Advanced
Platform: My own custom solution
Trading: Emini Futures
Posts: 49,364 since Jun 2009
Thanks: 32,048 given,
96,623
received
Hi guys,
It is my pleasure to welcome back Ryan Curran, CPA, for our 383rd webinar event, on Thursday, April 30th @ 4:30 PM Eastern US.
This webinar would normally be available only to Elite Members, however, considering the extraordinary times we currently face and the tax implications, I have decided to make the webinar open to everyone.
The title for the event is "2020 Tax Topics for Traders w/ Ryan Curran CPA", and bullet points include:
- Detailed Discussion of Trader Tax Status - What tax benefits does TTS afford taxpayers?
- MTM Election and implications
- Wash Sales
- Tax Reporting Requirements
- Entity Choices - Sole Proprietorship / LLC / S-Corporation / C-Corporation
I'm trading futures out of an IRA roth account. Account grows tax free(assuming I can be profitable) and there are no taxes/penalties if you withdraw after the age of 59 1/2. There are some other withdraws that are exempt as well. This is my simple strategy.
I needed some help or advice about a tax related question. Say someone has an account through Interactive Brokers and they have the legal resident of Saudi Arabia listed as the current country of residence (currently live and work there). However they are a citizen of the Philippines, however the wages made from working there are tax free. Here comes the question. If that same person holds a U.S. stock and gets paid a dividend who pays the tax or who takes the tax? I know some countries withhold a certain percentage of the dividend paid. I thought I read that Saudi withholds 5%, but the Philippines withholds 30%. If you are a legal resident of Saudi Arabia and they withhold, is it still required to pay taxes again to the Philippines? Thank you for the help if anyone has experience with this.