I am a retail full-time trader thinking of starting an entity, LLC. I know I need to speak with a CPA/attorney for legal advice. I'd like to hear personal experiences on trading as a retail vs under an entity.
retail vs trading under an entity
- Thread starter FuriousTrader
- Start date
an entity is important if u are a full-time trader. if that is the case, and u are on your own, i recommend a SMLLC with an election to be taxed as an S-corp. that way u can take a reasonable salary and the excess can be withdrawn exempt from self-employment taxes. u also build in the AGI deductions (health, 401k).
I agree S-Corp tax status is the way to go. In addition to the AGI deductions, another upshot to taking a salary is that you are a W-2 employee, and gain all the "legitimacy", including the option of collecting unemployment if the unthinkable happens. However, in addition to the W2 payroll taxes, the entity will need to adhere to your state's requirements as an "employer". Workmans comp and unemployment insurance are fairly common. Of course, these are deductions to the entity. Each state is different but as example in my home state of NV, the entity pays an additional 2.95% on the first 27,400 of wages paid, per employee, for unemployment insurance. Workmans comp insurance adds another 2% or so. These are requirements for employers who pay wages of over $225 in NV.
Thanks for the replies.
Search; (setting up an LLC ) on this forum
It'll give you ample to read
===================
Call Green for guidance
http://greencompany.com/
You can use Leagal Zoom to set it up
http://www.legalzoom.com/
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Only reason to set one up, is to manage money - otherwise not worth the effort (and there is effort involved throughout each year)
RN
It'll give you ample to read
===================
Call Green for guidance
http://greencompany.com/
You can use Leagal Zoom to set it up
http://www.legalzoom.com/
=======================
Only reason to set one up, is to manage money - otherwise not worth the effort (and there is effort involved throughout each year)
RN