Tax Question

[Eric Arp 2]

Hey guys, I have a question related to taxes.  Specifically, how are you guys handling them?  A bit of background for context, I am trading out of a cash account at TD (not retirement).  I have been practicing and trading the last few months successfully, and I'm looking to investigate possibly trading full time.  

I have read that full time traders who are active often open a business account to conduct their trades from.  What are your thoughts about this?  Just looking for some advice in this area. 

If posted in the wrong forum, I apologize in advance.

[Bailey Nevener 83]

Eric,

I am not a legal counselor, but here is my understanding.  I have entered the idea of creating an LLC to protect my assets and reducing my taxes.  As far as tax benefits, if you are a Single Member LLC then you are basically disregarded by the IRS and are taxed as a sole proprietor.  That means you wouldn't have any liability protection or tax benefits. 

However if you form a regular LLC then you can avoid self-employment tax legally, as well as having the liability protection an LLC provides.

https://www.investopedia.com/articles/trading/09/incorporate-active-trading.asp

This will probably lead you on the right track.

[Eric Arp 2]

2 hours ago, Bailey Nevener said:

Eric,

I am not a legal counselor, but here is my understanding.  I have entered the idea of creating an LLC to protect my assets and reducing my taxes.  As far as tax benefits, if you are a Single Member LLC then you are basically disregarded by the IRS and are taxed as a sole proprietor.  That means you wouldn't have any liability protection or tax benefits. 

However if you form a regular LLC then you can avoid self-employment tax legally, as well as having the liability protection an LLC provides.

https://www.investopedia.com/articles/trading/09/incorporate-active-trading.asp

This will probably lead you on the right track.

Thank you Bailey!

[hailchaser2 185]

next week BBT is having a tax expert give a webinar for lifetime members.

[Eric Arp 2]

1 minute ago, hailchaser2 said:

next week BBT is having a tax expert give a webinar for lifetime members.

Thanks hailchaser.  Unfortunately I’m not a lifetime member...😞