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The Tax Thread
Started:July 27th, 2010 (09:01 PM) by Big Mike Views / Replies:12,550 / 134
Last Reply:March 20th, 2014 (08:51 AM) Attachments:1

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The Tax Thread

Old March 10th, 2012, 11:40 AM   #71 (permalink)
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jz166 View Post
my mission for 2012 is to make my account tax free.
what? pay tax to bail out billionaires? not me.

so how will you do that? are you going to trade out of a roth account?

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Old March 10th, 2012, 04:05 PM   #72 (permalink)
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I am a struggling trader who may be turning it around and like many have that dream of trading for living. I wanted to look up the tax commitment on how it it should be handled and found this article: Taxes on Commodities Trading .

Which in summary says: You will receive a 1099B from your broker which you will state your profits and losses for the year, subtract the losses from the profits and that will give your capital gains.. Here is where I found it most interesting: " There are favorable tax rates for commodities as they are taxed at 60% long-term capital gains and 40% short-term capital gains. Long-term gains are capped at 15% and short-term gains are taxed at your ordinary tax rate, which depends on your adjusted income. You do not have to worry about accounting for and listing each individual trade on your tax returns. You just need to know your net profit or loss."

He goes on to show an example calculation. I didn't hear any of you mention this but this would be great news. Unfortunately I didn't see a date on the article but I was hoping some of you who are profitable and have a kick ass CPA could confirm this?

P.S. Also as a side note on figuring out profitability for trading I am starting with a profitability target/goal and just wanted to see what the tax ramifications etc are and how much my targets should be per day/week etc. There appears to only be approx. 250 trading days per year. I was wondering if any of you actually kept a log and have a good idea of how many days you realistically trade. I know some weeks around holidays many of you sit aside and of course vacations and crappy trading keeps you out.

Thanks, James

Found out this posting related to the topic:

Lessons from the Pros - 02/14/2012 Issue - OTA Tax Pros Article: The Advantages of Trading Futures

Regards.

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Old March 14th, 2012, 12:44 AM   #73 (permalink)
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rainbowchaser View Post

I would be careful using the advice of an educational company instead of a tax consultant who specializes in futures trading. They incorrectly stated that index futures are treated as 100% short-term capital gains when futures for a broad-based index is actually a 1256 contract and thus eligible for 60 percent long-term / 40 percent short-term.

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Old March 14th, 2012, 12:53 AM   #74 (permalink)
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Speaking of taxes:

Tip


Please see this thread for Traders Accountant Tax Q&A, 2 hours of education from a reputable accounting firm:
https://www.bigmiketrading.com/traders-hideout/18523-webinar-traders-accounting-tax-q-your-business.html




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Old March 16th, 2012, 07:58 AM   #75 (permalink)
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Mike

Due to time constraints, please do not PM me if your question can be resolved or answered on the forum.

Need help?
1) Stop changing things. No new indicators, charts, or methods. Be consistent with what is in front of you first.
2) Start a journal and post to it daily with the trades you made to show your strengths and weaknesses.
3) Set goals for yourself to reach daily. Make them about how you trade, not how much money you make.
4) Accept responsibility for your actions. Stop looking elsewhere to explain away poor performance.
5) Where to start as a trader? Watch this webinar and read this thread for hundreds of questions and answers.
6)
Help using the forum? Watch this video to learn general tips on using the site.

If you want
to support our community, become an Elite Member.

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Old March 16th, 2012, 09:03 PM   #76 (permalink)
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In regards to why some dont pay taxes...


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Mike

America: Freedom to Fascism-Full Length Documentary -America: Freedom to Fascism-Full Length Documentary - YouTube


America: Freedom to Fascism is a 2006 film by Aaron Russo, (Aaron Russo - Wikipedia, the free encyclopedia) which alleges among a variety of claims that income tax is illegal. The documentary covers many subjects, including: the Internal Revenue Service (IRS), the income tax, Federal Reserve System, national ID cards (REAL ID Act), human-implanted RFID tags (Spychips), Diebold electronic voting machines, globalization, Big Brother, taser weapons abuse, and the alleged use of terrorism by government as a means to diminish the citizens' rights.

The Film Determined to find the law that requires American citizens to pay income tax, producer Aaron Russo set out on a journey to find the evidence. This film which is neither left, nor right-wing is a startling examination of government. It exposes the systematic erosion of civil liberties in America since 1913 when the Federal Reserve system was fraudulently created.

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Old March 26th, 2012, 05:24 PM   #77 (permalink)
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My Tax Plan (your mileage may vary)

Big Mike asked me to post this entry from my journal over here.
https://www.bigmiketrading.com/trading-journals/17841-ctrl-alt-del-reboot-trading-journal-5.html#post204319

I plan to trade in my Roth as well as I become more consistently profitable.
I went with Green Tax, anybody else have experience with them. Mine has been good.

Tis tax season, so I thought I'd throw in my two cents.

I created a partnership entity, declared trader tax status, and hired a professional tax firm a couple years ago. This year, I am looking profitable, and am going to establish a mini 401k.

Without an entity and trader status, your deductible losses are limited to $3k per year. Who could ever imagine that you might lose more than $3k just starting out. Imagine it.

I've always done my own taxes, I may again. But each time I see the work done by the pro's, and thinking I can just copy it for next year, I pause, and have not switched back yet. This year I did have some local tax folks look at my past returns, and they all, 3, said stick with who I've got. So it is a littler trickier filing trader taxes than most.

And the mini-401k lets you put part of your profits in a tax advantaged account. And I believe you can trade in it later. So it's a double win. Hope to open mine up this year.

There are two national providers of this service plus plenty of local entity and tax guys, one you may already have a relationship with. I did not have anyone local, so I went with one of the nationals (not the one that recently did the webinar, as I wanted an entity and a cpa. Do your own due diligence).

I believe you have until April 15 to declare trader tax status for 2012. So definitely look into that now and see if it's for you.

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Old March 26th, 2012, 10:54 PM   #78 (permalink)
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rpm123 View Post
I created a partnership entity, declared trader tax status, and hired a professional tax firm a couple years ago. ... I believe you have until April 15 to declare trader tax status for 2012. So definitely look into that now and see if it's for you.

Thanks for the info rpm...
Do you have to create an entity to declare your trader tax status, or can one do this without setting up an entity, much in the same way one can run a business as a sole proprietorship?

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Old March 27th, 2012, 12:19 AM   #79 (permalink)
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1099 B, are over stating taxes due

Securities Traders Need Tax Relief on IRS Cost-Basis Reporting Rules | GreenTraderTax Traders Association

Green abd Company seems to keep their ear to the ground on tax issues that affect us.
Securities Traders Need Tax Relief on IRS Cost-Basis Reporting Rules

477 Letters and Emails Sent So Far


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New “cost-basis reporting” rules for 2011 are not functioning properly. Botched implementation is unfairly causing millions of taxpayers to significantly overpay their tax bills. The IRS should have issued the same set of rules for brokers and taxpayers, but did not. How can the IRS now send tax notices and audits to hundreds of thousands of taxpayers over 1099-Bs prepared under one set of rules, while holding taxpayers accountable to another set of rules? Taxpayers did not sign up to be deputy accountants for this mess!

Kindly sign in below to read our full petition. Please sign and send it to your Congressmen very soon. For more background information on this problem, see our cost-basis reporting page at http://www.greencompany.com/EducationCenter/Trader-Tax-Center/Cost-Basis-Reporting.shtml. Thank you for your help. Robert A. Green, CPA, CEO GreenTraderTax.com, Managing Member Green NFH, LLC, Leader TradersAdvocacy.Org. Please send comments to info@greencompany.com

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Old March 27th, 2012, 12:28 AM   #80 (permalink)
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josh View Post
Thanks for the info rpm...
Do you have to create an entity to declare your trader tax status, or can one do this without setting up an entity, much in the same way one can run a business as a sole proprietorship?

I believe the entity (partnership) allows more deductions, in that I wanted my wife to attend trading travels. Green and Company has a treasure trove of info on their website. See if that can answer your questions for your situation. And compare to the answers from the recent seminar by traders accounting. GreenTraderTAx is the site I believe. I don't mean to turn this into a vendor thread, but they have alot of info on the site to read and you need to see how it applies to your situation.

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