it would be foolish to never pay into ss. every american should strive to pay in enough to at least qualify for minimum ss and medicare benifits.
Possibly, I verified a lot of it with my own research, not from a tax pro but from other sources on the internet. But as always, don't be like me and try to do your own taxes, consult a pro . There is actually a presentation that goes with the slides that I should have posted. http://marketheist.com/2010/12/16/trader-public-service-what-is-trader-tax-status-with-steve-ribble/
Not always, the amount you receive is proportial to the amount you paid in. I actually worked a real job and paid SS tax for 20 quarters, so yeah I have considered going for the minimum 40 quarters. I wouldn't get much, but at least I could probably get back what I paid in (depending on how long I live and assuming SS is still around in 40 years).
What about the treatment for capital losses? The way I understand it, you can only deduct $3,000/year (rolling over the excess) of capital losses as a non-trader. As a professional, you can net out your gains and losses, and be taxed on the profits. Example: $500,000 gross gains $250,000 gross losses All gains/losses are short-term Non-trader $500,000 taxed at 35% = $325,000 gross after tax gains $325,000 after tax gains - $250,000 losses + $3,000 yearly deduction = $78,000 net gains after tax. Trader $500,000 - $250,000 = $250,000 net gains before tax $250,000 taxed at 35% = $162,500 net gains after tax (not to mention wash sales, etc.) Is this calculation correct? If correct, does it also apply to futures gains/losses (i.e., the $3,000 limit)?
Unless you are dealing with carryover losses, it all goes in the same bucket so it's not that complicated ... http://invest-faq.com/articles/tax-cap-gains-rates.html
OK, so you can net your gross gains and losses every year to compute your tax (notwithstanding short/long term treatment issues), even if you are a non-pro?
Ah thanks I stand corrected .... it is biased toward people who earn a low salary or didn't work for many years. I did the calculation and if I work for 4 more years to meet the minimum, I would get $970/month, a lot more than what I put in. Dang it, does this mean I have to get a job
yep. the only real advantage of pro status is a few expense deductions and the ability to use nol. avoiding wash sales calculations if mtm is nice too.