Hey you guys! This is on my list of topics to research, but would love to know how we would go about filing taxes as a forex trader. I was told that I shouldn’t need to worry about this unless I’m making like thousands a day, or some crazy amount. Have any of you guys gone through the process at all?
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Depends on what country you live in.
Look on the governments web site and it will tell you
Or hire an accountant if you make enough money.
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In the US, short term trading is considered “short-term capital gain” and is taxed like any other income.
However, if you qualify the IRS rules as a “Professional Trader” you can deduct expenses from all your trades. “Unfortunately, the IRS does not provide a clear definition of what constitutes a professional trader.”
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It depends what country you’re trading in of course.
In the UK, you can spreadbet tax free as it’s under the same classification as “gambling”. If you’re trading with other types of accounts, it’s usually under capital gains tax which is around £10k tax free. There’s also rules around whether it exceeds your primary income i.e. your job.
I don’t think you necessarily have to worry until you’re making that sort of money.
Just make BANK first 
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Thanks! I’m in the US. I’ll definitely read the details on our gvt’s site, but in the meantime I’ll focus on gaining these pips lol
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Oldie post, but might get you started looking elsewhere.
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about to check this post out now, thanks!
May also depend on what you are trading (assuming you deviate from FX) and how soon you realize those profits. The best advice that I can give you is to speak with a local accountant that is familiar with this area. Not all accountants are expensive, depending on where you live, and you may even be able to get a consult at no cost.
thanks! I actually have a tax guy that I go to, I have no idea why i haven’t asked him, but I’m sure he knows what I need to do.
Even if you use tax software, it’s not straightforward. Do a Google search on “how is forex trading taxed” and you’ll find countless confused traders since the beginning of time.
When trading stocks held less than one year, investors are taxed at the same rate as their ordinary income. When trading futures or options, investors are taxed at a 23% rate (calculated as 60% long-term x 15% max rate + 40% short-term rate x max income tax rate). I hope this helps you.
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