Taxes and the K-1?

I could use some pointers from anyone who receives a K-1 each year (i.e. traders with the LLCs like Bright, VTrader, Assent, etc).

1. Say I begin trading with an LLC tomorrow. I realize I personally missed the April 15 Mark to Market election date, but does that matter for me? I seem to be under the impression that the LLC as a whole has elected the MTM for all of their subaccounts so it's not an issue for me. Please correct me if I'm wrong here.

2. As far as business expenses (computers, internet, financial publications/software, etc) go, can I personally deduct them at the end of the year? Or is this something that can only be done if I'm a sole proprietor and not a part of a larger LLC.

3. How do these LLC's handle your tax reporting, if at all? Do they just send you difficult, tedious trade statements at the end of the year that you are responsible for taking to your personal accountant to figure out? What kind of record-keeping should I keep personally or do the various LLC's do a good job of aggregating everything and just rely on me to bring the tax info to an accountant?

Thanks in advance for the help!

 

Answers below. usual disclaimer- get your tax advice from a good tax accountant rather than free message boards.

 

You guys need to pay both federal and state income tax on your profits reported at the k-1?

 

Yes.

 

i just give my K-1's and let my accountant handle it. just spend the $100-$200 for an accountant. software like turbotax wasnt really made with K-1's in mind. and most people dont file K-1's so it is hard to find good advice from ppl who know what they are doing (unless they are an accountant).

 

What's the cut you guys looking at with a income of 50,000-100,000 at some avarege US state?

 

Nearly impossible to answer there are so many variables. As a broad genralization, I would say plan on a 15-20% effective tax rate( just total taxes / gross income). I came in at 12.5% for last year, but I have other business income I can mess around with.

 

I have to disagree with you here. I've used TurboTax a few times, including this year. It has a section specifically for K-1s. They also make it easy to import your retail trading acct info..although I ended up doing my by hand b/c they didnt have ThinkorSwim on the list , but I think I neede to click on "Penson Financial". No biggie.

If you have a more complicated Tax situation I would recommend an accountant, but my taxes are simple. Cost me $40 and took me about an hour to do my e-file this year.

 

Looking at wikipedia they say federal bracket is 28% for $74K-$158K