So if you have independent contractors working for you, the employer does not have to pay workman's compensation nor unemployment compensation taxes? If so, isn't it better to start a business by hiring independent contractors, instead of employees, so you can save alot more money?
the irs does not allow you to make that decision. if people do work only for you under your supervision they are employees under the law no matter what you may call them.
IRS Form SS-8 is a starting place if you are not sure if you're talking about employees or independent contractors.
Suppose you and your working spouse set up a LLC for trading purpose, it is possible to distribute most of the profit to the spouse who works full time in another company. Being a passive member, he/she doesn't have to pay social security tax, right?
i would not try to beat the government out of ss tax until you at least have enough credits to qualify for ss. if you do not have enough credits you will not be able to collect ss and medicare. medicare is the biggie. it is one of the greatest bargains in america. my mother had one operation that cost more than all of the contributions she made over a lifetime and it was all paid by medicare. http://www.ssa.gov/pubs/10003.html Work credits--When you work, you earn credits toward Social Security benefits. You need a certain number of credits to be eligible for Social Security benefits. The number you need depends on your age and the type of benefit for which you are applying. You can earn a maximum of four credits each year. Most people need 40 credits to qualify for retirement benefits.
Most anything's possible... but that answer is not really appropriate, because the question is not applicable, really, to a family owned trader LLC.
I posted this in a different thread and it was recommended I post it here: I started an LLC last year with my father, elected MTM for securities only, and traded 90% futures. I'm getting ready to file an LLC return -- from what I understand it's a partnership return (for a multi-member LLC) which passes through gains/losses. My question is -- are there any "gotchas" for filing the return? The LLC made about 40 stock trades (mostly in December when I started trading a new system for equities) and around 1000 futures trades, most not held overnight (the longest holding period for a future was about 6 days). I'd like to avoid paying $1500 to a CPA when it's mostly single line item futures trades, but on the other hand I want to make sure the LLC gets trader status. Does anyone know if the entity will need to qualify for trader status? Separately, do you need to qualify in the LLC for trader status in order to deduct expenses? Or can you deduct them whether or not you qualify (I think we do qualify)?
Does anyone know if the entity will need to qualify for trader status? Separately, do you need to qualify in the LLC for trader status in order to deduct expenses? Or can you deduct them whether or not you qualify (I think we do qualify)? You definitely can deduct expenses. Only individuals, from my knowledge, have to qualify for trader status. When you filled out the LLC paperwork, what did you say the purpose of the business was? I put full time trading down. I wrote off 16k in losses my first year, start up costs, software, etc. Just learn what you can deduct, you have to read up maybe, and have a regular CPA do it. That's what I did. It was $300 for my LLC and $150 for my wife and I personal. You can't write off a company car, unless you are the exception and drive alot for your trading, which most don't. You can write off mileage to trading meetings, seminars, etc. Good luck. Dan P.S. Don't do your own return. Stats have shown that there is a much lower chance of audit if a prof. does it. IRS audits self prepared returns more because they know ppl make mistakes. Pay a CPA, accountant, EA to do your taxes, no turbo tax, etc.
Interesting. Green is the expert but he charges like it. Their website says $750 to start, then likely $1200 as the total. Given that I have 40 stock trades (and also 10 option trades I forgot about) and the rest are futures trades (which you don't report -- just the net gain/loss) this seems like an awful lot of money. Has anyone used traders accounting? They seem to charge less. But I'm wary of getting what I pay for....