Whoa! We have to talk. You need a new accountant. Didn't you know, the more you make the LESS YOU PAY.
If your tax preparer EVER did something so outrageously incorrect they should be fired on the spot. It's unbelievable the incompetency in tax preparation. If the preparer was a CPA, I would file a complaint with the state board regarding the issue. I've done some thing that stretch the regs sometimes according to what the client desires, however, the above is inexcusable. Later, Cracked
Not sure I understand the issue. Was it implying that by being a trader and conducting business during market hours you are precluded from also trading a retirement account? An IRA/Retirement account is an entity unto itself and separate from other assets held by the trader. Much like the Chinese Wall at brokerages between the research and investment banking arms.... (OOPS, Bad analogy!!!!!!!) One way to circumvent any issue is to have the account at a separate brokerage house. I believe that this would be no different than having another account outside the business that you trade for yourself. If you have a link I'd love to read any info regarding the issue. Later, Cracked
YIKES!:eek: It sounds like you might be talking about what is called UBI, UBIT or UBTI (Unrelated Business Taxable Income). UBTI occurs when a tax-exempt entity tries to hide the taxable gains of activities that are not directly tied to the entity's tax-exempt mission. It usually impacts charities and educational institutions that run de facto for-profit subsidiaries (e.g. a university book store). It can impact IRAs that have gains from "unrelated debt-financed income" (most often associated with real estate partnerships, publicly traded partnerships, or using margin borrowing). (As I was Googling around on this this issue, I found comments that suggest that owning listed options or derivatives in a retirement account might also generate UBTI or what are called "prohibited transactions.") I'm not sure how active trading in a retirement account could run afoul of IRS regs (not that that logic would get me very far in Tax Court). I'm not sure of the difference between my trading the account and buying shares in a mutual fund that trades the account (except that I don't get to deduct my trading labor costs and expenses from gains, whereas using a mutual fund does let me deduct these expenses from gains). What I HATE HATE HATE HATE about tax issues is that NOBODY knows the answer to so many questions, not even the IRS -- its all fuzzy gray lines, subjective litmus tests, ambiguous language, conflicting regs, etc. If you are not a joe-average income earner that can use the 1040-EZ, then chances are that you are painfully close to one of the these ugly little gray lines. The tax code is all part of this country's "Accountant's and Lawyer's Full Employment Act" in my opinion. I do not mind paying my share of taxes -- I've travelled all around the world and definitely concluded that the U.S. is pretty good place to live. What I loath is the horrible complexity of the process and the uncertainty that no matter what you do, the IRS might decide that you are doing it wrong. OOOOF! -Traden4Alpha
Traden4Alpha- You Hit the Nail right on the Head ! The complexity of the tax system is beyond comprehension- how about we label it just plain stupid. And what is even more incredible is that people(taxpayers, congress, state and local politicians etc, etc.) collectively tolerate it! As you alluded to, most, if not all, reasonable people understand taxes must be paid(at some level) to enjoy the benefits they provide. Accountants and lawyers aside(and I think even they would admit the complexity is stupid) is there anybody who thinks the tax laws are as they should be. How about this- just addup ALL your income, wages, interest, cap gains, trading, all of it and just take a percents- 10, 15 18, 20, 25(whatever is necessary to generate the same level of receipts) and mail it. While I fully understand how the lobbyists work, I would prefer not to believe they are totally insurmountable. O.K. there, I am done ranting on that subject- I feel so much better now
I too, would love a flat-tax system, but I fear that complexity is inevitable. If they tried to create a truly simplified tax code, people would immediately want all their well-intentioned tax-breaks back. And who can argue against encouraging retirement savings (IRA tax code), home ownership (mortgage deduction), non-regressive tax-code (low tax rates for lower-income people), charity (deductions for giving), deductions for very sick people (medical expense deduction), etc. etc. But then, you get people that try to scam the system by loading up on a bunch of taxbreaks. So then you need a bunch of rules to define what counts and what does not (and all the documentation to prove it). But, still you get upper-income people who try to wrangle their way into lower tax bracket. So then you decide to implement the Alternative Minimum Tax code. Between the bleeding-heart liberals and money-grubbing tax cheats ....puts us right back where we started. I say OOOF again! (ranting does feel good!) -Traden4Alpha
Flat taxes cannot happen because it would reduce the IRS.Same thing with congress.Simple tax laws mean less opportunity for congressional hanky panky.Both congress and IRS increase their power and influence with tax laws that cannot be understood by their victims. Another thing.With all this corporate crime it isnt just investors who lose.Billions of tax dollars have been lost.What is the IRS doing about it?Not a damn thing.They are too busy chasing J6P for $200 here and $2000 there. Rant,rant,feels good