The IRS might come after me

Discussion in 'Professional Trading' started by cashmoney69, Nov 30, 2006.

  1. I called my broker and asked for a check for 780.00 (last months profit), I put the check right into the bank...I never filed and kind of tax form..was I susposed to?

    Oh well, I guess they cant come after me for money I already spent. :cool:
  2. :) :( :D :p :cool: :mad: :eek: :confused:
  3. If you owe taxes this year (because of trading profits) then you will probably have to start fileing qtrly estimated next year.

    It's not like a casino, where if you win over $2500 you have to fill out a tax form!
  4. Ebo


    Don't worry, your broker will email a local IRS agent when they see you are online, make sure you have clean boxers on.
  5. Don't worry, you have plenty of time to lose your profits before the end of the year.
  6. nkhoi

    nkhoi Moderator

    for a mere $780? relax, you are flying below the radar level.
  7. jmccain


    When I get any type of income that I need to pay taxes on, I put my marginal tax rate (lets say 30%) into a money market account and the rest into my regular account. I only withdraw from that specific money market account when I need to pay taxes. That way I don't get caught short at tax time and in the meantime I get 3-4% on it.

    Works for me. I've learned the hard way that you do not want to owe on your taxes and not have the money available.

  8. Just curious why one would have to pay estimated taxes on a quarterly basis when theoretically, you have no way of knowing whether or not to expect a significant loss towards the tail end of the year. Then it would just be an interest free loan to Uncle Sam :mad:

    Is there any one out there that waits until the filing day to pay taxes, even if there is some sort of penalty? I'm thinking that depending on the person's rate of return, it might be more profitable to pay the penalty in order to have additional funds invested throughout the year??

    Any thoughts??
  9. My friend said that too but I didn't believe him. Well that's good to know.
  10. jmccain


    You haven't done anything illegal. There is no tax form to fill when you withdraw money from your brokerage account.

    It doesn't mean you wont have to pay taxes on your profits though. When you file next year your profit will show up on your Schedule D assuming you haven't lost it by year end.

    And if you don't file Schedule D the IRS will assess the wrong tax amount just like it did for another guy on this board that got an 80K tax bill.

    If you have big profits this year, next year the IRS will ask you to make quarterly payments. Each payment will be about 25% of this year 's tax owed. It's your choice wether you pay them or not, but if you don't and you owe taxes at the end of the year, they will assess interest charges and penalties.

    #10     Nov 30, 2006