New traders, you’ve come to the right place to learn about taxes,
accounting, regulation and business matters.
The first order of business for new traders is your transition process.
Perhaps you recently left a job or business, or you’re preparing
to do so. Perhaps you are unsatisfied in retirement. Trading may or may
not be right for you. Some new traders delve into it with success, while
others test the waters first. Do what’s best for you and your family.
Tax strategies are a huge factor in a trading activity. The goal is to
deduct all trading losses and expenses as ordinary business losses, and
to reduce taxes on trading gains and portfolio income with lower tax rates,
like the 60/40 futures tax rates. An entity often comes in handy too.
It looks better to the IRS and unlocks additional tax-deduction breaks
like retirement plans and health insurance premiums. Beware of one of
the biggest mistakes for new traders: Falling for a multi-entity scheme
offered from other trader tax sites and tax-free state incorporators.
Look here before you leap!
We recognize that many new traders first take educational classes, and
some teachers highly recommend a trading entity from the start. While
that is a good idea for some, it’s not a good idea for others. Almost
all the leading trading education companies recommend our site.
Our recommendations for new traders:
Read the content in our free Trader
Tax Center. This area contains excerpts from Green’s
2013 Trader Tax Guide. Better yet, purchase and read that entire
Pre-Business Education Expenses: One of the biggest challenges
for new traders is how to handle their recent and current trading education
expenses. Some tax firms — and notice they are not CPA firms —
promise full tax deductions for education, no matter how old and how high
the amount. They are very wrong. Watch our recent Webinar on "How
Traders Deduct Education" dated Feb. 12, 2013. These blogs also
address the subject.
03 10 - Dangerous entity scams targeting traders, part 3: Education
expenses are a problem in dual-entity schemes
27 10 - Dangerous entity scams targeting traders, part 2: Are trading
education, seminars and travel expenses tax deductible?
15 10 - Dangerous entity scams targeting traders, part 1: Dual-entity
schemes don’t deliver business treatment without qualification
for trader tax status
After reading and watching our content, we recommend a 30-minute phone
with Robert A. Green, CPA.
If an entity is a good idea for you — and it’s best to find
out first from Robert Green in a consultation — you can purchase
our low-cost entity
formation service afterwards. Robert Green chooses the right entity
for your family and he sets it up in a tax-efficient and low-cost manner.
Our outside attorneys do all the legal documents and more.
It’s important to start your accounting correctly from the start
of your trading activity.
For securities traders, we highly recommend TradeLog
for GreenTraderTax. We’ve added the tax knowledge to this industry-leading
program since 2000. It’s simple to download your transactions and
the program does the work you need, including wash sales and much more.
Our accountants can do this TradeLog
work for you as well.
Futures and forex traders don’t have to use a program like TradeLog;
they can rely on accounting and tax information provided by their brokers.
Futures traders receive a Form 1099 at year-end showing their net taxable
gain or loss. Summary reporting is used for forex traders too and most
brokers offer good online reports. Securities traders are the ones who
need line-by-line or trade-by-trade reporting; with lots of transactions,
TradeLog is the answer.
accounting: Our accountants can set up and handle your entity
accounting on an ongoing basis.
compliance services for traders is our core business.