Taxes for newbie traders.

Discussion in 'Taxes and Accounting' started by seasideheights, Sep 16, 2007.

  1. Why file as a trader in securities if you're not going to deduct expenses? Makes no sense.
     
    #11     Sep 18, 2007
  2. If you do, you are most guaranteed an audit.

     
    #12     Sep 18, 2007
  3. What are you talking about? I've been doing it for nearly a decade. I would think most serious traders do this.
     
    #13     Sep 18, 2007
  4. ener555

    ener555

    Ok I am doing a K1 for the first time and although a bit confusing using a w2 for years it doesn't seem that bad. I just filled out schedule D (1040) as instructed by my K1 but I have expenses I want to deduct too.

    I used a couple of news services + i traded from a home office + my health insurance premiums were high too. I don't really understand that u get an automatic audit if you have those expenses but I'll deduct them anyways because I paid for them.

    Now I just wanted to make sure that all those expenses (news services, home office, health insurance premium etc.) are going to be on Schedule C? Is that correct?

    Thanks
     
    #14     Oct 13, 2007
  5. ener555

    ener555

    Sorry I filled out schedule E as instructed by my K1 and not schedule D
     
    #15     Oct 13, 2007
  6. Seek out professional advice... i.e. CPA... for a couple of hundred dollars, It will be the best $200 you will ever spend...
     
    #16     Oct 13, 2007
  7. ener555

    ener555

    Just figured it would be a simple question whether I deduct expenses such as home office, news services health insurance etc on schedule C or something else. I am sorry that one fairly simple question (hope its simple) isn't worth $200-$300 to me.

    Thx
     
    #17     Oct 13, 2007
  8. Surdo

    Surdo

    If you don't value a CPA signing off over a potential audit, then your priorities are in the wrong place, the CPA fee is deductible off next year's taxes and he will probably save you a few more thousand off this year's.

    I file some of my expenses on a schedule C, part V, and some others on Schedule A, but my accountant fills in the forms!

    Good Luck,

    surdo
     
    #18     Oct 13, 2007
  9. Chances are that those items you WANT to deduct are not qualified, very few items are. You may consider yourself a business, however, the IRS may not. A CPA will prevent you from serious mistakes and penalties. Simple question, simple answer.
     
    #19     Oct 13, 2007