Estimated Tax Question

Originally posted by Don Bright
First off, good job making money Hitman, and yet I wonder about your tax numbers....seem kinda low.

The note about SS tax is wrong (the part about buying/selling securities) for prop traders....we simply give our traders a K-1 as "distribution of partnership income" ...and we made the election to exempt the Self Employment tax. Be sure WorldCo did the same.

As far as your previous losses are concerned, you may be subject to a limited amount of carryforward....you better check with your CPA.
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Don,

TriPacks quote comes directly from the IRS website - I read it myself. It seems to state very clearly that a person in the business of trading his or her own account is not liable for SE tax on the earnings. This is an area of concern to me. Why do you say that Tri Pack was wrong?

PS
I just re-read your post and I see that you are talking about prop traders. Does anyone else have a different take on SE tax and trading profits?
 
Do traders have to pay estimated quarterly taxes or is it a choice if you want to? Also, do you only pay the penalty if you get audited?
 
Originally posted by vhehn
its your choice to pay estimated taxes.your penalty will be figured when you do your taxes.
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So the penalty must be paid you're saying?
 
to the IRS I read about. Traders say you have to list each stock bought/sold through out the year, NOT using the 1099 your broker sends. I have been simply sending the 70 or so pages sent to me by my broker (1099) with my year end 1040 since 1998. The IRS has never told me not to. Why do so many traders have to manually list all their trades every year?
 
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