Taxes at a proprietary firm.

P

prospective_25

I am looking to join a proprietary firm to trade a firm's capital, but want to make sure I understand how I will be taxed. I am a single 22-year old. I know if I make a draw on my profits(or future profits) I will be taxed like it is income tax.

Will my profits have been taxed otherwise (such as some form of capital gains tax) before they are taxed a second time as income tax?

Any estimates?

Any kind of clarification would be wonderful...thanks in advance!
 
Hi. Most firms now have an LLC at the end, and will issue you a K1 at the end of the year. Also most of these will select an election in a tax code that will distinguish you as a trader. This is of a great benefit to us, since we will not have to pay social security and fica tax. This amounts to 15.3% on the first $70K or so for singles, and 3% there after. Plus you will not have to go through all the schedule D transactions.
 
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