EDUCATION CENTER
Trading Business Expenses

Business traders can deduct all reasonable business expenses, whether they have trading gains or losses, saving around $5,000 per year on average. Business-expense deductions hinge on qualifying for trader tax status, of course. Investors, on the other hand, are very limited. Investment managers have business expense treatment, too.

The good news is you can still claim trader tax status for 2013, and even other open tax years (usually up to three years prior). Unlike Section 475 MTM (mark-to-market) accounting, which must be elected by the April 15 deadline, trader tax status can simply be claimed by a taxpayer after the fact, based on facts and circumstances. If you’re just learning about trader tax status, you might still be in luck for tax-year 2013.

INVESTORS VS. BUSINESS TRADERS
Unlike business traders, investors are stuck with restricted itemized deductions. Investors can’t deduct pre-business education including most seminars and travel costs, home-office expenses, start-up costs and many other types of trader expenses.

See our guide for all the different types of trading business expenses and how to deduct them in the best way possible. Included in the guide: how to deduct tricky items like home office, education, start up costs, organization costs, seminars, travel to seminars and much more.

This is an excerpt from Green’s 2014 Trader Tax Guide

Copyright © 2014

Consider a 30-minute consultation with Robert A. Green, CPA or Darren Neuschwander, CPA, co-managing members of Green NFH, LLC.

     

Many Webinars in March

Highlighted Recent Recordings:

*Entities & Retirement Plans for Traders
*Trader Tax Law Update: Current Developments
*2013 Tax Reporting & 2014 Planning
*Forex Taxation
*Audits of Performance Records
*Kick-Off to 2013 Tax-Filings for Traders
*ObamaCare taxes are starting to affect traders
*The Tax Court Was Right To Deny Endicott Trader Tax Status
* Investment management: Key updates
*Learn the DOs and DON’Ts of using IRAs and other retirement plans

Trader Tax Center

Tax Newsletter & Calculators

Highlights (see the full archive):

Mar 27: Protect yourself from market losses with a Section 475 MTM election Read More

Mar 25: IRS guidance on bitcoin transactions will chill its use Read More

Mar 24: SEC Large Trader Reporting Rule Read More

Feb. 27: Another trader tax court loss (Assaderaghi) Read More

Feb. 1: Net investment tax details Read More

Jan 14: New IRS guidance on SE tax deductions affects partnership AGI-deduction strategies. Read More

Jan 9: A major tax reform bill in 2014 is unlikely, and “tax extenders” may be history, too. Read More

Jan 7: Kick off to 2013 tax filings for traders. Read More

Dec 4: IRS final regulations for Net Investment Tax help traders. Read More

Dec 3: Bitcoin is a hot commodity, but is it taxed like commodities, assets, or currencies? Read More

Nov 15: Another non-business trader gets busted in tax court trying to cheat the IRS. Read More

Nov 6: Hedge fund investors depend on “assurance” from quality independent CPA firms. Read More

Oct 29: ObamaCare taxes are starting to affect traders. Read More

Sept 15: Not Easy For New Yorkers To Escape Big Apple's Tax Bite. Read More

August 30: The Tax Court Was Right To Deny Endicott Trader Tax Status Read More

August 18: Common trader tax mistakes Read More

July 24: Learn the DOs and DON’Ts of using IRAs and other retirement plans in trading activities and alternative investments Read More

March 31: PFG investors can deduct theft losses on 2012 tax returns with Rev. Proc. 2009-20 safe harbor relief. That’s great news! Read More

March 5: Caution, downloading securities Form 1099-Bs into TurboTax often leads to incorrect tax filings Read More

Sept 5: High-income traders and ObamaCare’s 3.8% Medicare tax Read More


GreenTrader blog archive, Forbes blog, Benzinga blog.

 




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