One of the most confusing aspects for Traders and Investors can be handling the US Tax Code. Personalty I use an Enrolled Agent as my CPA. I have trained her myself over the past 20 years and she is great. For those of you new to trading I highly recommend Green Company because they can set you up for a minimal fee with your own personal accountant.
By default the IRS bumps all traders into the Investor class which is very bad for many reasons. You must actively pursue Trader Tax Status (TTS) to take advantage of the lower tax rates and the increased tax deductions.
They also print many 2013 and 2014 Tax Guides for traders. The best thing is that they have many endorsements from major brokers. Spend some time on their website and I am sure you will find the answers to your tax questions that will keep you out of trouble as well as save you money. I recommend that you get their boo because they even cover BitCoin this year.
Several anomalies in state tax law can catch you unaware. First, if you trade using an LLC in California, they tax an LLC on the gross income and disallow all deductions. Second not all states have caught up with changes made by “Obama Care”. Nice thing about living in Nevada we get all the breaks.
Green Company offers a 2014 Trader Tax Guide for a very reasonable fee and it is worth its weight in Gold. The company will prepare your taxes or review tax submission if you do it yourself or have a CPA do them for you. There are even provisisons for hancling losses from MFGlobal and PFG.
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