Tax Savings Doing “Trading as a Business”

List of Possible Common Write Off Expenses

Many Independent Investors and Retail Traders do not know that years ago the IRS established a ruling for the retail side of the market, whereby they could have the same tax benefits as a Professional Trader. The ruling was done because the IRS must treat all taxpayers in the same manner.

Many people want to learn how to trade in order to make extra income, start a career as a trader so they can pursue other opportunities in their lives, or take control of their life for example rather than working for a huge corporation. However the set up your trading, tax status, and how you approach trading can dramatically affect what happens at tax time every year. Now is the time to start thinking about next year BEFORE the New Year starts.

Independent Investors and Retail Traders who are called “Hobby Traders” by the IRS, are not allowed to write off expenses in excess of their capital gains. However those doing “Trading as a Business,” can write off what any other small business or entrepreneur individual is permitted to write off as expenses of doing business.

There are common expenses that an Independent Investor and Retail Trader who have established themselves as “Trading as a Business” could possibly be allowed to take. However first of all you must seek the counsel of a Tax Adviser who is licensed and registered to provide advice. You need to find a CPA, or tax adviser who is well versed and familiar with the IRS ruling for Retail Traders who are “Trading as a Business.” If your CPA or Tax Adviser is unfamiliar with this ruling which has been around for over 15 years, then find someone who is well versed in this area of tax law.

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Trade Wisely,
Martha Stokes CMT

Chartered Market Technician
Instructor & Developer of TechniTrader Stock & Option Courses

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