On numerous occasions, we have offered traders insight into how taxes interact with the market and affect trading strategy. As a provider of advanced options trading platforms and low cost stock trading, we give traders all the resources they need to understand the industry and cultivate success.
‘Tis the season for tax returns. Filing tax returns has never been a simple task — especially for traders. However, the recent tax reforms may confuse traders even more. To avoid paying more taxes than necessary, how can traders adapt their investment strategies? Now that investment expenses have been eliminated, what can traders do to maximize their profits? Find answers to these questions and more in the posts below.
Although the current administration has implemented many changes, some tried-and-true tax strategies remain effective. For example, maximizing your 401(k) contributions will still result in a lower tax rate over time. Capital gains tax may have been slightly reworked, but selling a losing investment before the end of the year may still lower how much tax you have to pay. Note that although investment expenses have been eliminated, broker fees may still be somewhat recouped by applying for Trader Tax Status (TTS), which allows traders to use business treatment for trading expenses.
Employee benefit deductions may have changed somewhat, but creating an entity can still provide traders with some advantages. In this blog, we discussed how entity returns simplify your taxes by consolidating your trading activity on one return. Now that the tax rate for corporations has been reduced to a flat rate of 21%, creating an entity may be more advantageous than ever.
Last but not least, we recently invited Robert Green of GreenTraderTax.com to present a webinar that covered the recent tax reform changes that affect traders most. In his presentation, he covered the reduced tax rate for corporations, the elimination of many deductions, and many other important changes introduced by the reform. Perhaps most significantly, he stressed the benefits of TTS, which potentially allows traders to capitalize on the 21% flat tax rate applied to corporations as well as a 20% deduction on pass-through qualified business income.
Besides our posts concerning taxes in the trading industry, we also publish content relevant to many other concepts and issues that affect traders every day. To subscribe to our online stock trading blog, visit our blog page here. To learn more about our software solutions for traders, try a demo or call us at 1.888.577.3123 today.
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