Incorporate as a small trader
- Thread starter Acuario
- Start date
There's a lot of tax related info for US traders on this site:
http://www.greencompany.com/index.shtml
http://www.greencompany.com/index.shtml
I always thought that an individual can elect trader in securities with the irs to eliminate wash sales and write off commissions but once elected, the irs won't let you 'un'select it. Which is why, I thought at the least, many individuals would trade in an llc to have the business rules of no wash sales and the $3000 rule scratched? This is a grey area.
Thanks for the input everyone. I posted this question for two reasons, both tax-related:
-As tigerbalm pointed out, incorporating provides personal protection from any liabilities, lawsuits, etc.
-When you file a Schedule C, you're paying a 1/2 self employment tax on net earnings from your trading. This is in addition to your marginal tax rate on any other income you may have (wages, etc.) By forming an entity, you're not subject to this self employment tax, which could be large if you're making a lot of money.
I appreciate the links provided, good stuff!
-As tigerbalm pointed out, incorporating provides personal protection from any liabilities, lawsuits, etc.
-When you file a Schedule C, you're paying a 1/2 self employment tax on net earnings from your trading. This is in addition to your marginal tax rate on any other income you may have (wages, etc.) By forming an entity, you're not subject to this self employment tax, which could be large if you're making a lot of money.
I appreciate the links provided, good stuff!
Incorporating is just an exercise in mental masturbation until you're trading profitably.
That said, an acquaintance incorporated in Nevada which he said was a really good tax deal, much better than incorporating in our home state of Maryland.
That said, an acquaintance incorporated in Nevada which he said was a really good tax deal, much better than incorporating in our home state of Maryland.