How Do Profitable Traders Save on Their Taxes?
Stock trading is an up-and-down endeavor and investors can win big, lose it all or maintain an even keel. For those investors that achieve a high level of success and become profitable traders the next trick is to learn how to save on taxes. That can be a completely different game in and of itself. So what can you do to keep your tax bill down if you have been a profitable investor?
There are many strategies that successful investors employ to save on taxes, including deducting their home office expenses. Many traders work out of their home and that means they can deduct their work space, their electronic equipment and several other items. It could be as much as 10 – 20 percent of their home. This can be a very helpful deduction for investors as well as anyone who works out if their home.
Another smart move that successful traders make is to deduct their business travel, as well as their expenses for seminars and education. Many traders can also deduct their health insurance premiums. Retirement plan contributions can also be tax deductible if a trader qualifies for tax trader status. He/she also has to use an S-Corp or C-Corp management company to qualify. As for highly successful traders with a lot of income, they should consider a defined-benefit plan. These plans can allow for much larger tax-deductible contributions.
One other smart move is to save on taxes with long-term capital gains. If you hold an investment for 12 months or longer your capital gains tax rate is lower than when you sell an asset that you’ve held for less than a year. All of these steps are possible options for traders who want to cut back on their tax bill. You can contact GROCO to learn more about these and other tax-saving options. Call us at 1-877-CPA-2206
Revisiting Your Will
[vc_row][vc_column][vc_column_text] Revisiting Your Will The importance of having a will cannot be overemphasized. It’s not simply the way that you direct the distribution of your financial and personal assets. Your will also enables you to designate an executor (or personal representative) who will act in your stead to meet your obligations and steer your assets…
Tax Tips for New Ecommerce Entrepreneurs
Tax Tips for New Ecommerce Entrepreneurs New ecommerce entrepreneurs can find them confused and confounded by the tax and accounting requirements of their venture. And that’s a shame: If someone’s spotted a great new category and successfully built a web presence, heck, that someone shouldn’t find themselves bogged down with the accounting minutia. The entrepreneur…
HERO Act Expands IRA Options for Military
HERO Act Expands IRA Options for Military Members of the military serving in Iraq, Afghanistan and other combat zone localities can now put money into an individual retirement account, even if they received tax-free combat pay, according to the Internal Revenue Service. Under the Heroes Earned Retirement Opportunities (HERO) Act, signed into law on Memorial…
Dealing with IRS Collections
Dealing with IRS Collections There are times when taxpayers are unable to pay amounts owed the IRS on a tax return or as a result of an audit. Presuming there is no disagreement about the tax liability, just a lack of funds to pay, the taxpayer is best served by avoiding the collection process. There…