Tax Planning

Getting Ready For Your Trading Year

The active trader needs to plan ahead for the tax consequences of their trading activities. This section lists critical information the trader should consider.

If you are a day trader who has enough trading activity during the year to be considered engaged in a day trading trade or business (“Trader in Securities”) there are tax considerations and elections that could be critical for you to consider.  Being a Trader In Securities means you actively trade your account on a full or near full time basis.  If qualified, you have tax reporting options that can save you a tremendous amount of tax dollars depending on your circumstances.

Our goal is to not only to help you maximize any benefits of being a “Trader in Securities,” but to assist you to become completely educated about the tax laws. We can help you plan your way to dramatic tax savings. Timely tax elections could be critical for your trading career!

We offer everything you need to become educated about the laws and make the proper tax elections.  Additionally, we are available for teleconferences to personally consult with you.
Whether or not you trade full time, having your tax return prepared by the CPA experts who work with day traders all over the country on a daily basis will prove invaluable for you. Our knowledge of the tax laws for online stock traders is unsurpassed.

For New Traders:

How you treat your trading activities from a tax standpoint is crucial! You have choices that can mean savings of literally tens of thousands of tax dollars to you. Your mark to market election must be made by April 15th of the year it is to be effective, and is critical. The election process is complicated and depends upon the results of your trading activities. I can not stress the importance of properly planning and making this election.

For Active Traders who did not elect the mark to market method of accounting for 2021 but wish to do so for 2022

For those individuals who actively traded during 2021 but did not elect the mark to market method of accounting for their day trading business, the year 2022 presents new opportunities for you. First, you need to carefully evaluate your situation before making the trader election for the year 2022. Evaluate your 2021 trading results. Were you profitable, break-even or did you incur losses? It makes a difference and there are some very important considerations.

For Active Traders who did make a valid mark to market method of accounting election during 2021

First of all, congratulations are in order! You made a very intelligent tax planning decision that I’m sure you are now grateful for. I would highly recommend that you consider our tax preparation services for your 2019 tax returns. We are experts in this area of tax law and the insight and planning opportunities we can and will bring to the table for you may prove invaluable. You may also want to consider the benefits of incorporating your trading activities. Incorporating your trading activities into a separate “trading entity” removes all reporting activity from your personal tax return, which may prove beneficial under certain circumstances.

Please visit our Benefits of Incorporation section on this website.

In summary, your trading history or strategy could cause the mark to market method of accounting to be a critical tax election. The key is when and how this should be done. We are here to help you minimize your tax liabilities and are experts in this area of tax law. We should be considered a professional partner in your trading activities, so please don’t hesitate to contact us. We are here for your benefit.