nice attitude. when asking for peoples input in response to a question try being more humble you prick.
Sorry, but you need to learn your laws as well. If the total of your net earnings from self-employment from all businesses is $400 or more, you must pay into the Social Security and Medicare systems by filing Form 1040, Schedule SE (PDF), Self-Employment Tax. Self-Employment tax consists of the Old-Age, Survivors, and Disability Insurance (social security) and the Hospital Insurance (Medicare) taxes.
If you have profits, I suggest trading through an LLC. Three advantages are better protection of assets, greater opportunities for tax deferred savings such as a sep-ira, and a better appearance on your tax forms when applying for loans, credit, etc. For example, a "trader in securities" is generally not going to be looked at by a credit committee as favorably as an "investment company owner".
I created a corp. My tax guy said there is a 1.5% savings on your tax rate or so as a full time futures trader. Don't ask me how or where, I just know what he says.
lol thats why people are so confused as the misinformation on this board is amazing. trading income is not subject to social security tax as its not earned income . thats why you can't write off health ins or a retirement plan. people really need tot take time and talk to a trader accountant
self employed full time here, you don't need to file as a corp to write off and also good thing is you don't have to pay selfemployment tax which is a big plus....only reason to set up llc is if you manage other peoples money and you want to protect against potential litigation
Actually you're wrong. If you're a sole proprietor and not paying social security taxes you're an audit waiting to happen. Straight from the IRS: You are a sole proprietor if you are the sole owner of a business that is not a corporation. Report your income and expenses from your sole proprietorship on Form 1040, Schedule C (PDF), Profit or Loss from Business (Sole Proprietorship), or on Form 1040, Schedule C-EZ (PDF), Net Profit from Business. If the total of your net earnings from self-employment from all businesses is $400 or more, you must pay into the Social Security and Medicare systems by filing Form 1040, Schedule SE (PDF), Self-Employment Tax. Self-Employment tax consists of the Old-Age, Survivors, and Disability Insurance (social security) and the Hospital Insurance (Medicare) taxes. For more information refer to chapter 1 of Publication 334, Tax Guide for Small Business.
lol i refuse to even converse with ignorant people who know nothing of the trader tax laws. I'VE BEEN FILING MY TAXES AS A SOLE PROP WITH A SCH C PAYING NO SOCIAL SECURITY FOR 9 YEARS. AS I SAID INCOME FROM TRADING STOCKS IS NOT EARNED INCOME AND THATS WHY ONE PAYS NO FICA. I USE ONE OF THE BIGGEST TRADER ACCOUNTANTS TO DO MY TAXES. I BEG YOU TO LEARN ABOUT YOUR TAXES BEFORE YOU EVEN TRADE, WOULD YOU GO IN TO THE PIZZA BUSINESS WITHOUT KNOWING ABOUT TAXES ON THAT BUS. GO TO GREEN AND COMPANY'S WEBSITE AND LEARN A FEW THINGS. HERES A PIECE FROM HIS WEBSITE read below from greens site and LEARN YOUR DAMM TAX LAWS BEFORE RUNNING YOUR MOUTH EDUCATION CENTER GTT RESOURCES: SELF EMPLOYMENT TAX Unlike all other types of "sole proprietorship" or "unincorporated" businesses, securities and/or commodities traders, with trader tax status, with the mark-to-market or cash methods of accounting, are exempt from self employment taxation (SE taxes). Their trading gains are not deemed "earned income" for purposes of SE taxes, health insurance premium deductions (from adjusted gross income) or for retirement plan contributions. Note, commodity traders who are registered as dealers or traders on a commodities exchange are subject to SE taxes. See more details about this exception in our Commodities Examples Guide. Proprietary traders who are treated as independent contractors receive a Form 1099-Misc for non-employee compensation. They are usually subject to SE tax. Click here to learn more. If you have questions about whether SE taxes apply to you, e-mail us at info@greencompany.com