IRS tax for full time active trader

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NewTrader

I was a salary employee before I started full time day trading years ago. I live in a very small town, where I really can't find a CPA or TAX specialist who is familiar with active trader' report using form 4797.

I researched and read a lot about tax report. practically I still have a lot of confusions. I hope I can get some help from here.
1. I report gain/loss in form 4797, and expenses (books, subscription &etc) in schedule C. Is that right?

2. Say I have loss on 2012 for 15K. with expenses(in schedule C) and personal deduction (in Schedule A), I became have adjusted gross income of -18K

I have gain on 2013 for 25K, with expenses and deduction I have gross income of 22K Do I have to carryover all the loss of 18K of 2012 and become gross income of 7K. Can I carryover 8K (gross income become 17K) and leave 10 K loss of 1012 for 2014 and future years deduction?

Thanks.
 
I see no reason you need to have face-to-face contact with a CPA for taxes. You're better off using a specialist via the Internet. There are several who should be satisfactory, such as Robert Green (http://greentradertax.com/).
 
NewTrader said:
I was a salary employee before I started full time day trading years ago. I live in a very small town, where I really can't find a CPA or TAX specialist who is familiar with active trader' report using form 4797.

I researched and read a lot about tax report. practically I still have a lot of confusions. I hope I can get some help from here...
More...

I agree with rwk.

If you're seeking tax advice from anonymous strangers online (e.g. Elitetrader.com)...you may as well get such from professional online tax service that's specific for traders and investors. There's a few out there easily researched via Google. Next, after you've used a service for one year and if you're taxes were properly prepared to your satisfaction...use it as a template for the following years when you do it yourself.

Although its none of my business, why couldn't you just drive to the nearest big town or big city and find someone that can do your taxes ? You could then pay a little money for your taxes and then compare it to the results of the online tax service you used...any differences between the two...call them and ask questions so that you'll be better prepared to do your taxes on your own the following year.
 
NewTrader said:
I have gain on 2013 for 25K, with expenses and deduction I have gross income of 22K Do I have to carryover all the loss of 18K of 2012 and become gross income of 7K. Can I carryover 8K (gross income become 17K) and leave 10 K loss of 1012 for 2014 and future years deduction?

Thanks.
More...

My understanding and recollection from my own trading account, unless you have claimed the MTM status (Mark To Market) with the IRS for your trading business, then you are capped at $3,000 carry forward losses. Otherwise, you can carry forward the entire loss until it's offset by gains. (I elected the MTM status awhile back, and thus I was not capped by the $3,000 figure).

Disclaimer: I'm not a tax expert, nor an attorney, so don't take the above statement as tax advice. I suggest going online and finding an accountant that does taxes for traders.

GreenTraderTax is a good source. Mann and Company is another, see link below.

http://daytradertax.com/
 
ScalperJoe said:
My understanding and recollection from my own trading account, unless you have claimed the MTM status (Mark To Market) with the IRS for your trading business, then you are capped at $3,000 carry forward losses. Otherwise, you can carry forward the entire loss until it's offset by gains. (I elected the MTM status awhile back, and thus I was not capped by the $3,000 figure).

Disclaimer: I'm not a tax expert, nor an attorney, so don't take the above statement as tax advice. I suggest going online and finding an accountant that does taxes for traders.

GreenTraderTax is a good source. Mann and Company is another, see link below.

http://daytradertax.com/
More...

Thank you all, anyway.
 
Can I pay for them to handle my taxes. I hate spending an entire weekend doing tax work. It's a real pain due to my options trading etc..
 
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