Does anyone have any experience with this firm? I set up a consultation with them, and I'm a bit leery to listen to anyone besides Green. They're suggesting both a C corp and an LLC. The books I have from Green and Tesser advise against C corporations. I'm inclined to play it safe and stick with Green Co, but I thought I'd see if anyone else has used these guys. http://www.tradersaccounting.com/
I'm having some doubts already for the same reason though I'm going to consult with them anyway and see how it goes.
Oh man forget these scoundrels! The drone I talked to today did not answer my questions and showed no caring whatsoever with who I am, what my plans are, and what's in my best interest! Their "Tax Plan Booklet" they sent me says that if you trade about 15 to 20 or more trades per month you should set up an LLC only (though they don't state why) and that if you trade less you would benefit more from using an LLC for the account(s) and a C corporation to manage the business. He recommended the dual entity even though I trade far more than 20 trades per month and when I questioned him on this, he still insisted on dual entity without listening, considering, nor answering my questions. There was alot of dead air i.e. "f**k you just give me your money or hang up", at least that was my impression...and I was right because the grand total for "setting me up plus 12 months of accounting services" came out to $3375. Alot of money to pay while receiving no care or info. On that note.... I then proceeded to Green's website. You have to pay this guy 150 bucks to speak to him for a half hour or 300/hr if you have more questions...anyhow, you can either click and order your entity for 600 (no prior consultation!) and then receive your consultation "free" or you can pay 150 for your pre consultation and then it's 450 for your entity formation. Either way it's a game to lock you in and mess with your head and the temptations that lie within, definitely rubs me wrong. Soooooo... I then went to edaytradertax.com, called them and spoke with a CPA who had a whole other view on the entity/business formation of a trading business... at least they were honest and didn't try to sell me anything I probably don't need. Now I see that I need to do more homework so I can steer my own ship, I didn't trust what these peddlers were trying to push on me but at the same time I don't know enough about trading as a business and taxes so...I say to anyone else in my situation, just be careful and don't get taken advantage of. By the way, are there any experienced traders willing to throw in your two cents on the topic? Thanks! JK
I used Leonard Rogofsky at Taxes for Traders and found him to be knowledgeable, honest, and accessible. http://www.taxesfortraders.com/
I prepare mine with Tradelog http://www.armencomp.com/tradelog/ then take the output and go to HR Block (there is a woman at the office I go to that's pretty sharp) ends up costing about $450/yr for both, and has gone smoothly every year
They suggest a C Corp for a few reasons...you can deduct all your medical expenses, you only pay 15% on your first 50K of earnings (then you pay individual rates after that), and there are supposedly more deductions. Also, they're telling me that with a Corp only, you can set up an IRA, then borrow from it and put it in a personal trading account, and trade those funds. (I assume tax deferred). But guys like Tesser and Green don't seem too fond of the C Corp. There must be a good reason. Supposedly there's an issue of double taxation, but tradersaccounting is telling me that it only applies to dividends. Also, according to the website taxesfortraders, "Although a corporation can transact business in any state of the country, there are complex rules regarding nexus and apportionment of income that must be complied with. Also, of particular importance to Traders, if 60% or more of your C-Corp's income is derived from trading it may be considered a Personal Holding Company and subjected to a 35% tax rate. If your sole business is trading, C-Corps should not be used without first consulting with competent accounting and legal professionals to implement strategies to avoid this result."
it looks like leanord fodsky isn't even a cpa? i've been using green for many years and to put it simply he's the babe ruth of trader taxes period. never had one problem and look anywere and he's quoted. but he's very very expensive so i'd recommend after you learn a little to find a local cpa and groom him to do yours. thats my step next year as i basically know how to do it.
I use Paul Mann at daytradertax.com. He is a CPA and specialized in trader issues. TA tries to sell you more then you need, plain and simple. I talked to them at length, the talked to Paul, then confronted TA on their overselling and they weaseled and said I could get away with only a LLC not a combo C Corp/LLC. TA wanted over 3k, they sell a new trader, like me, a cadillac when you just need the corolla. Green is very good from my understanding, but a new business starting out, like me, doesn't make alot in the first year, so spending high$$ when not making alot doesn't make sense. Green is good I'm sure for guys making 200k plus trading, they don't sweat $$$ per hour. Paul charged me $600 bucks to set up the LLC gave me an hour free initial consult and I used my regular tax lady for LLC write offs. They are very similar to regular business write offs except almost no car write off because you trade from home. I was able to write off over 10k in losses vs. almost nothing as regular investor. Heck if you have a bad year you can accelerate all losses that year against regular income vs. 3k max as an investor. My wife is the VP/Member and I am the Pres/Member for the LLC. It allows income shifting, which is helpful because my wife make a pretty good salary. Especially if you are in Denver like me, Paul can't be beat IMO. He is a frugal guy like me, a good value. A good webiste for some trader write offs is traderstatus.com I think he posts here sometime. Good luck to all of you. Dan