Tips For Traders On Preparing 2023 Tax Returns
Green Trader Tax Blog
by Robert Green
2w ago
Trader tax status (TTS) constitutes business expense treatment, unlocking meaningful tax benefits for qualified active traders. The first step is to determine eligibility. If you qualify for TTS, you can claim some tax breaks, such as business expense treatment, after the fact and elect and set up other tax breaks—like Section 475 MTM and employee-benefit plans (health and retirement)—on a timely basis. TTS business expensesIf you qualified for TTS in 2023, you could claim business expenses on Schedule C. No IRS election was required. Schedule C is part of an individual tax return (Form 1040 ..read more
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Traders Should Focus On Q4 Estimated Taxes Due January 16
Green Trader Tax Blog
by Robert Green
3M ago
Many traders have substantial trading gains for 2023, and they might owe 2023 estimated taxes paid to the IRS quarterly. Unlike employers, which withhold taxes on wages, brokerage firms do not withhold taxes on trading gains. Depending on their specific tax situation, other taxpayers may be able to wait to make tax payments until April 15, 2024, when they file their 2023 tax return or extension. The first three quarterly estimated tax payments were due on April 18, June 15, and September 15, 2023; the fourth quarter payment is due on January 16, 2024. Many new traders didn’t submit estimated p ..read more
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Tax Planning For S-Corps
Green Trader Tax Blog
by Robert Green
6M ago
Traders eligible for trader tax status (TTS) use an S-Corp to unlock health, retirement and SALT deductions. It’s important to act before year-end using payroll.  S-CORP OFFICER COMPENSATION TTS traders use an S-Corp to arrange health insurance and retirement plan deductions. These deductions require earned income or self-employment income. Unlike trading gains, which are unearned income, a TTS S-Corp salary is earned income. S-Corps pay officer compensation in conjunction with employee benefit deductions through payroll tax compliance done before year-end 2023. Otherwise, traders miss th ..read more
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Tax Planning For Traders
Green Trader Tax Blog
by Robert Green
6M ago
Recent tax acts don’t change trader tax status (TTS), Section 475 MTM accounting, wash-sale losses on securities, or the tax treatment on financial products, including futures (Section 1256 contracts) and cryptocurrencies (intangible property). It’s helpful to consider IRS inflation adjustments in income and capital gains tax brackets, various income thresholds and caps, retirement plan contribution limits, standard deductions, and more. See the article, IRS Provides Tax Inflation Adjustments for Tax-year 2023. The IRS increase for 2023 is about 7%. EXCESS BUSINESS LOSSES AND NET OPERATIN ..read more
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ChatGPT Explains Trader Tax Benefits
Green Trader Tax Blog
by Robert Green
10M ago
I asked Bing’s ChatGPT AI to write blog posts on “trader tax benefits” and “trader tax status.” Read their blog posts below with my comments added, highlighted in yellow, and in parentheses. I also used Grammarly to improve ChatGPT’s grammar, and there were many suggestions for improvement. Overall, ChatGPT did a good job, but it’s rudimentary advice. There are many nuances in our content that ChatGPT missed. GreenTraderTax and my Forbes articles are a source for ChatGPT’s blog posts. I also chatted with ChatGPT on Bing and was impressed with its short answers and prompting for additional ques ..read more
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Highlights From Green’s 2023 Trader Tax Guide
Green Trader Tax Blog
by Robert Green
1y ago
Use Green’s 2023 Trader Tax Guide to receive the tax breaks you’re entitled to on your 2022 tax returns and execute tax strategies and elections for tax-year 2023. Our guide covers the impact of recent tax laws on traders. BUSINESS TRADERS FARE BETTER Investors have restricted investment interest expense deductions. The Tax Cuts & Jobs Act (TCJA) suspended investment fees and expenses for 2018 through 2025. Investors have a capital-loss limitation against ordinary income ($3,000 per year) and wash-sale (WS) loss adjustments, which can trigger capital gains taxes on phantom income ..read more
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Tax Extensions: 12 Tips To Save You Money
Green Trader Tax Blog
by Robert Green
1y ago
Individual tax returns for 2022 are due April 18, 2023. However, most active traders aren’t ready to file on time. Some brokers issue corrected 1099Bs right up to the deadline. Many partnerships and S-Corps file extensions by March 15, 2023, and don’t issue Schedule K-1s to partners until after April 18. Many securities traders struggle with accounting for wash sale loss adjustments. The good news is that traders don’t have to rush the completion of their tax returns by April 18. They should take advantage of a simple one-page automatic extension with payment of taxes owed to the IRS and state ..read more
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Tax Relief In Disaster Situations
Green Trader Tax Blog
by Robert Green
1y ago
There have been many federal disaster situations around the U.S. these past years. See if you qualify to pay taxes and file tax returns after the original deadline. See Tax Relief in Disaster Situations. For example IRS: May 15 tax deadline extended to Oct. 16 for disaster area taxpayers in California, Alabama and Georgia. Check with your state(s) to see if they follow the IRS disaster relief —for example, More Time to File State Taxes for Californians Impacted by December and January Winter Storms. Here’s content from Darren Neuschwander, CPA, Managing Member of Green, Neuschwander & Mann ..read more
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Tax Tips For Traders Preparing 2022 Tax Returns
Green Trader Tax Blog
by Robert Green
1y ago
Trader tax status (TTS) is the ticket to tax savings. If you qualify, you can claim some tax breaks, such as business expenses, after the fact and elect and set up other tax breaks — like Section 475 MTM accounting (tax loss insurance) and health insurance and retirement plan deductions through an S-Corp— on a timely basis.  TTS vs. Section 475 MTM accountingIf you qualified for TTS in 2022, you could claim business expenses on Schedule C. No IRS election was required. Don’t confuse that with a Section 475 MTM accounting election that a TTS trader could have submitted by April 18, 2022, f ..read more
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Trader Tax Return Reporting Strategies
Green Trader Tax Blog
by Robert Green
1y ago
The IRS uses multiple tax forms for trading businesses eligible for trader tax status (TTS). It can be confusing to taxpayers, accountants, and the IRS. Traders enter gains and losses, portfolio income, and business expenses in various tax forms. Which tax form or schedule should a forex trader use? It depends on their circumstances. Which form is correct for securities traders using the Section 475 MTM method? Can trading gains be reported directly on Schedule C? The different reporting strategies for the various types of traders make tax time not so cut and dry. SOLE PROPRIETOR TRADING BUSIN ..read more
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