For years I've been filing Schedule E and have not put away any tax defered dollars into an retirment account. Now I'm questioning this practice suggested by my accountant. Strictly speaking, we prop traders trade other people's money although we do have some capital of a notional amount at our trading firm. The money we make is not off any investment we've made or we'd be viloating the margin rules big time. So is the trading profit a form of compensation for our work? Plus the firm takes additional 1% from our net profit. If the profit is strictly capital gains, should we get paid 100%? My accountant does not have the anwser. The big advantage with the money labelled as earned income is that we can put away 25% or up to $44,000 whichever is less into a SEP IRA and pay taxes years later. Any one?