Have you set up a corporation for your trading?

Just wondering if anyone is running their trading with corporate rules for tax purposes.

sounds like an interesting thing to do if you’re trading out of the U.S.

i’d like to know what the financial benefits are.

actually, it’s useful possibly, if you end up being a successful trader and can then attract outside funds.

just a thought

i will be using scorp or llc. but have not determined yet which one i want but will after i have spoken more with my accountant as i plan on having quarterly taxes and such. joanne. happy trading.:rolleyes:

You need to take a hard look at the tax differences between using a corporation or other structure and doing it in your own name. Also consider the overhead of structure. Might be that the filing fees, annual fees, and all that stuff doesn’t make it worth doing.

There are two major reasons for a corporation, LLC, or whatever. The first is limiting liability. That’s not really an issue if you’re really just trading your own money. The other is being able to write off some things as business expenses that you wouldn’t have been able to otherwise. Again, I think that’s probably a nominal benefit at best for most individuals.

Isn’t there a tax benefit by having only some of the money taxed at capitol gains rates?

I’m just getting started so I plan on trading in my own name. It doesn’t seem worth the hassle of setting up an LLC or a Corp for a micro account. It might be worth doing if the profits approach my day job, since you can pay yourself through dividends in an S-Corp and the taxes are lower. Also, until 2009/2010 or so, if you fall in the lowest tax bracket on regular income, the dividend tax is extra low, around 5%, which is why many exectives are taking $1 salaries and huge stock options.

Have you talked to an accountant or a lawyer about the tax benefits of incorporating? Unless you are hiring someone I can’t see any need for limiting liability.

I am not planning on it, it was just a question.

speaking about taxation… I have a broker in New York… but if I had a broker lets say in Great Britain, would I be taxed under British tax laws or would it be the Illinois tax laws??? If its taxed under the British tax laws do I still have to report it to the IRS???

I don’t know much about it as I am not having broker as two places. At present I am having Broker in Texas and I have follow the Texas tax laws. But as much I have heard you would be taxed under both Illinois and British Tax laws.

I do not know about the UK but here in my place I have to follow the local taxation laws. I think it is same everywhere with little bit of difference in laws.

I am based in Japan.
I did set up a LLC for trading so I can use it to pay me a salary and buy anything I need so the money I earn buys what I need (or want) before getting taxed.
Of course I would have set up a LLC if it was for making pocket money.

Get the Rich Dad, Poor Dad Book if you haven’t read it yet, it is great to explain how to be wise in financial things.

if you are making money in te US you need to set up a s corp or llc the cost is insignificant to the tax advnatages. You can do it on line for about 500.00 but the tax savings are enormous. Being able to write off many things for business is the key to being wealthy.

With the growing age of the cottage industry in the US, nearly anyone can set up what they believe to be a business in the US ato take advantage of the tax benefits.

As a result, audits are most likely increased to keep integrity amongst those that actually run a business, or those that set up a business for purposes of tax benefits solely.

Just keep accurate records and recognize what is a solid business related tax write off and what is not.

What kind of things are you guys writing off as business expenses under your LLC’s?

I’m going to setup an LLC in the coming year and would like to know the basics of what can be written off. I have heard of various friends writing their apartments/rent off if they trade out of home as well as computer equipment and internet connections.

Anyone doing anything much differenent? Could you write off commissions?

While I personally have an LLC, I don’t use it for trading. There’s really no need to at this point at all.

When you’re writing off items for deduction you can only write off what is a sole business expense. If you have an internet connection and you’re playing World of Warcraft on it, then you cannot write off your internet connection as a tax deduction. Same with the computer your purchased. Whatever you write off has to remain strictly for business, and not be used for personal items at all.

If you’re friend is writing off his entire rent, then he’s likely breaking the law. If you want to write off part of your rent then you literally have to figure to the square foot that you can write off. And that area can only be used for purposes of business and nothing else.

Your best bet is to consult with an accountant or lawyer to best see what type of business if any that you might want to create. Take note…if you’re not prepared to seek professional tax advice as to what business to create, then you really should have no business starting a business.

IF YOU ARE MAKING MONEY AT TRADING YOU NEED TO SET UP AN LLC OR S-CORP OR YOU WIL GET EAT UP BY TAXES. i HAVE AN LLC FOR MY OTHER BUSINESS AND I WRITE OFF SO MUCH THROUGH THE BUSINESS THAT IF I DIDNT I WOULDNT TAKE MUCH HOME. AS FAR A TRADING COMPUTERS INTERET CONNECTIONS ALL CAN BE WRITEN OFF. THE PREVIOUS POST STATES THAT IT HAS TO BE 100% BUT WHAT BUSINESS EQUIPMENT IS EVER USED 100% FOR BUSINESS. i HAVE 7 COMPUTERS AT MY OFFICE AND MY EMPLOYEES ALL USE IT FOR PERSONAL USE I.E EMAILS TO PERSONAL FRIENDS. NOW IS THAT 100% BUSINESS NO BUT DO I WRITE OFF 100% BUSINESS YES. Same with an auto, camera etc etc. back to trading commissions, office supplies, larger computer monitor, travel to seminars, meals discussing trading with others (50% deduction) educational books and many more. Now when your really start making money take the proceeds from trading and invest in real estate in the companys name and rent the property out. everything is a write off.travl to look at property is a write off. there are so many things once you start making money. Set up your company as an 9nvestment company or capital group so you can diversify its holdings within the company. They just have to be in the companys name. again as the previous post suggest consult with an atty and cpa but you will find this to be very advntageous.

Is that 100% legal? No.

Well if you use the 100% rule you are a better person than me. Ask anyone who uses a computer at work and never i repeat never goes to browse a non business purpose site i.e x mas shopping looking at cars to purchase vacation sites or emails friends families. and is suppose you never drive 60 in a 55 because that is not 100% legal. I take my hat off to you.

I own two laptops. One for business. One for personal. I carry two cellphones. One for business. One for personal.

In doing so, that doesn’t imply that I am a better man than you, or that you are a lesser man than me.

However, when lending advice to someone in the matter of taxation, you are doing that person a diservice by allowing them to think that they can get a free ride on tax write offs simply by assuming themselves as a business.

As far as your employees are concerned, there are software applications that are available to ensure that your business can run legally compliant.

Trade4x I have a LLC and im interested in trading through it. If you have a minute i want to ask you some questions about it. I tried to contact you directly but there was no way. Can you message me at <[email protected]>? thanks!