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
Collecting Classic Cars with Ardel Brown
Collecting Classic Cars with Ardel Brown Alan: I’m here today with Ardel Brown and we’re going to be looking at his car collection today. Alan: Ardel this is quite the man cave that you have here Ardel: Well it’s taken a little while to get it developed and fill it up, but it’s pretty full…
Study Shows Benefit of Lower Corporate Taxes
Study Shows Benefit of Lower Corporate Taxes Raise taxes on big business! That’s the cry of democratic lawmakers. Democrats argue that keeping the corporate tax rate high will help increase income for workers. While it’s true that wages have basically remained stagnant over the last decade, and the cost of living has gone up, increasing…
Costly Tax Mistakes Entrepreneurs Have to Avoid
Costly Tax Mistakes Entrepreneurs Have to Avoid Anyone can get into trouble with the IRS, including businesses. It seems as though entrepreneurs are especially susceptible to tax troubles, many times because they simply aren’t aware of all the tax pitfalls that lay ahead. However, many of these mistakes can be easily avoided. The key is…
Will the Wealthy Start Exiting California if Tax Hikes Are Extended?
Will the Wealthy Start Exiting California if Tax Hikes Are Extended? Just about everyone is aware that California has one of the highest tax rates in the country. So it wasn’t much of a surprise when voters passed a temporary tax increase back in 2012 that raised the state’s marginal income tax rate to 13.3…