hi everyone i have no income for the previous year to report and i have lost a 3000 on intraday futures trading, can i get a benefit from this somehow (like a refund)? thanks in advance
You can use up to $3000 of capital losses to offset other income on your U.S. tax return each year. If your net losses are greater than $3k, the losses carry forward indefinately.
As Hurricane stated, then the âcapital loss carryoverâ carries forward indefinitely until you do have income to offset. If you are married filling jointly your $3k per year limit will also offset your wifeâs income if she has any. You canât get a refund for previously paid taxes based on capital losses, the only way to do that it declare mark to market accounting, which is complicated and you would need the help of a professional, and since you are a futures trader you would give up preferential tax treatment so you would not want to do that. Basically if you have no income from you or your wife the loss will not do you any good until you have a year with income or capital gains for your loss to offset.
but you are asking the right questions. I pissed away a lot of money because I never understood the tax consequences of what I was doing. And it's not as simple as just having a professional prepare for you. Understanding taxes is just as important as understanding commissions and spreads. there are times when (depending on what you have on and your style of trading) that it may be better to just pay the late fine than to give them all your dry powder at the end of a quarter. there are times (not in futures but in stocks) when it may be better just to sell today and pay the higher short term cap gains than to ride it out for a week just to get a tax break, it's kind of hard to find trader specific tax advice for free. You'd be surprised how much you can pick up spending a lazy Sunday on the IRS website. Especially since you may be willing to take some risks a professional tax accountant would never condone.
You are so right, month of December can be like a war zone trying to figure out what to keep and what to bail on to get the best tax deal. It hard enough to keep track of the trading, then to add IRS to it....One thing I did learn long ago, spreads I put on late in the year, better to leg in than put on as a spread, can take the loss on last day of the year and hopefully get back into on first trading day of the year without losing much on the spread.
yes, it is crazy, just like you say, about every year at this time. I'm curious and very ignorant, what did we do before income taxes? I know they sure as hell don't like it when you tax whiskey and for that matter tea. Kind of off topic for this forum, but I think op's question was answered, but I like the title of the thread. Taxes is where it all comes down to. I've thought it through up one side and down the other and the perfect system is always very elusive. I finally figured out what a flat tax is. According that definition all money regardless of whether it is derived from earned income, capital gains , dividends or interest is taxed equally. Bad for us traders, but even a trader occassionaly cares about the country he may need to operate in. Consumption seems to really hit the poor harder than anyone else. We could elimintae about 70,000 pages of tax code by simply giving corporations a free ride and not taxing any money until it is passed to an individual. After all, in the words of our great leader, "Corporations are people too my friend" and apparently that is the only reason they are taxed.
Do you feel if we had no corporate tax, all the jobs we have lost to foreign countries would come back? China would have a fit if that came to pass. I liked Trump's idea of 25% surcharge on foreign made goods, but I think it should be 200%, that force corps to make factories here again.
maybe so, but I don't like forcing anybody to do anything. the surcharge is nothing more than a tariff, always sounds like a simple idea yes, I think a zero per cent coporate tax rate would attract a lot of businnes to USA. The politicians would never go for it because they get all their power from granting tax breaks to corporations in exchange for bribes. a better idea would probably be just to eliminate corporations Like I said, I don't know, maybe others no better, I'm just a small retail podunk trader. otherwise, until I know better, I am always in favor of lower taxes.