Tax Rates on Day Traders

Quote from Jayford:

This actually depends on whether or not you choose trader status so that you can claim "earned income" and contribute to an IRA. The beauty of it is that you can claim only a certain amount of earned income in order to do this. You pay FICA only on the earned income. This little trick can actually lower your overall taxes, while also giving you a separate tax free fund to build wealth. I do this for my position trading (in the IRA).

Its completely voluntary. Buy Robert Green's book on this. I forget the title. Try an author search via Amazon.
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Jayford correct me if I am wrong. I have done little bit(really little:D ) of reading on "offshore banking, hedge funds" etc. It seems to me it should not be a problem to set up trading business in a way to avoid paying taxes unless you want to repatriate money. Am I missing something??
 
Quote from Cesko:

Jayford correct me if I am wrong. I have done little bit(really little:D ) of reading on "offshore banking, hedge funds" etc. It seems to me it should not be a problem to set up trading business in a way to avoid paying taxes unless you want to repatriate money. Am I missing something??
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I never said anything about offshore banking. But, if you are a US citizen, living anywhere in the World, you owe taxes regardless of whether you repatriate the cash. Otherwise, you'd see people fleeing in droves. I'm not sure how the Corps get away with it, but its illegal for individuals. Lots of people do it though.

Note: I'm not a CPA. I've just been trading a long time so I know what's best for me tax wise. May be different for you.
 
Quote from TradingBillions:

Hey everyone. I'd like to know how high I will be taxed if I trade over 10-20 times per day in the futures market. Anyone have a percentage and what taxes I have to pay? Would tax rates be less if I trade through my business?

Thanks!
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Does anyone know (or know where I could/should look) if I want to find out how the IRS treats the trading of NON-US futures? In other words, is trading DAX or Nikkei futures treated the same (60-40) or differently as trading the S&P or other futures?
 
Quote from Jayford:

This actually depends on whether or not you choose trader status so that you can claim "earned income" and contribute to an IRA. The beauty of it is that you can claim only a certain amount of earned income in order to do this. You pay FICA only on the earned income. This little trick can actually lower your overall taxes, while also giving you a separate tax free fund to build wealth. I do this for my position trading (in the IRA).

Its completely voluntary. Buy Robert Green's book on this. I forget the title. Try an author search via Amazon.
More...




In order to claim trader status, dont you have to prove that most of your income is generated as a trader and not investor. Does the IRS actually allow you to choose a % in order to submit to IRA etc? So that part will be taxed FICA, etc. and the rest you choose to just be taxed income?? That is amazing!

Just curious. In the process of entering the biz, and trying to figure things out.
 
Quote from smilingsynic:

Does anyone know (or know where I could/should look) if I want to find out how the IRS treats the trading of NON-US futures? In other words, is trading DAX or Nikkei futures treated the same (60-40) or differently as trading the S&P or other futures?
More...
I am 80% sure 60-40 treatment doesn't apply to non-US futures.
 
Hi,

If I select MTM for this tax year, then gains/losses will be treated as ordinary G/L, not capital G/L? Does that mean Self-Employment tax of 15.3% will be due? Thanks
 
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