I was wondering if using an IBFX debit card in the US drawing funds from the UK institution would still require me to claim the funds as income for taxes? Not trying to evade or anything but just want to know the rules on this.
This is the first that I have heard of a broker offering a debit card, are there others? What would be the downside of this, if any?
Thanks
You will need to claim your profits, debit card or not. I believe you automatically get a 1099 at the EOY.
The only downside to having instant access to your funds would be less funds to trade with if you don’t set a limit. If you do well the majority of the time and your only spending your profits with the debit card, then I see no problem.
MIG doesn’t issue a 1099 and profits would only be taxed if transferred to a US institution (at least with Swiss brokers which is where my account is). So that is a different issue, if the funds never leave the overseas account (as in a interbank transfer) how can it be taxed in the US?
Swiss banks are giving over all info regarding US Citizens.
It came to a head, not a long time back, but its a done deal.
No anonymous-ness in the Swiss lands anymore.
Better to stick to paying taxes like ya should.
If say, 10 years from now, they found out you accrued monies but failed to report, would mean fines + interest and immediate federal prison time.
Go corporate to reduce taxes, pay quartely, dont go to jail, and continue to make money.
Even if you dont always agree to where your monies go, sometimes it is worthwhile.
Police/Hospitals for poor people/Roads etc etc…
Dont fight the man on taxes…
Good luck in your choice.
Also, i just remembered, banks have a reporting duty…over a certain $ amount, you are flagged to the Feds ie:FBI or some such agency.
In case of money laundering/drugs/bad peoples.
Also overseas to the USA transactions are ALWAYS monitored…The computer age and such.
Red
Thank you for the advice, I totally agree with paying taxes as a moral/legal obligation but definitely don’t like what the government is doing with my money. I had heard about the new policies of Swiss transparency and even heard that they don’t let US citizens open normal bank accounts anymore at a lot of places.
I will not do anything illegal but I have no problem using loopholes, etc to reduce my taxes so I can decide where to put the money. I already donate to organizations that I like to support so I would just do that more with my tax savings. I actually have a friend that hinted at tax evasion because we don’t get 1099s and such, I told him exactly what you said, its just not worth it.
The corporate option sounds appealing to me, I have look at Corporations and LLCs in the past. What entity would you recommend on the basis of tax savings? Do you have anything set up for your trading?
Thanks.
I think I found my answer. It looks like using credit/debit cards is a known scheme for “repatriating” offshore funds. And even if the broker does not report your data, it may be required to self report funds in an international bank on your tax form. It may be difficult for the IRS to find out but it is definitely not worth the stress.
Dunno which corp is best, but if you go corp, you may or may not have to ‘become’ a liscened forex (or the relative term) fund manager, which could mean college level courses.
Of this I am uncertain at this time, but it is something I definately would like to look into.
Anyone reading this know if you can be in a group without liscencing at trade for the group?
And/or similar with a corp?
Cause with stocks, if you sell signals without being accredited etc, you can get some serious trouble…So I’m uncertain how/where it applies to forex.
Red