Hello all!
I am new to FOREX and have been using a demo account for about 6 months now. I have been planning on going live at some point and have been trying to figure out the tax situation, I live in the US. I know I would have Capital Gains to pay for any gains. My question is can I start a “business” for my trading only. I would get a tax ID number for federal and state and use a program like QuickBooks to pay myself a salary and pay quarterly taxes as any business would. Is this possible and is this a better plan than just outright paying CGT? Any help would be great!
ok…
i’m in australia, so , not qualified to comment on the tax system in the US
but i see similarites here
in australia we have GST Goods and Services Tax which charges 10%
now we have standard INCOME TAX which is a tax based on how much you earn
mate, with all these questions
I HAVE ONLY 1 QUESTION
Why in god’s name are you asking the forum on babypips about tax advice ?
why don’t you just go and make an appt. with an accountant for a free 1 hour consult and ask a professional to advise you on the tax situation in america
i mean as a general rule, i can tell you this
you don’t need to start a business and have a business name for forex… unless of course you
are planning to start a firm that trades for others , in which ccase you’ll need a financial license
What are you going to do in this business that you propose to start
if you are looking to avoid tax, USUALLLY it’s illegal, EXCEPT when you do it legally,
again… you need advice from a professional
Hi and welcome.
I can’t help personally, not being US based, but hopefully an experienced US member will answer you.
You’re thinking right, find out the tax implications before you (hopefully) make money, rather than get hit with a big tax bill later.
Good luck
Its possible but I am not sure why you would. If you simply open up a personal account and trade on that you can settle up with taxes at the end of the year.
If you start a company and give yourself a paycheck you are now employing a foriegn national (yourself) and open up a ton of regulatory issues.
Then you need to employ an accountant, a legal bod, take on insurances and submit accounts and (in the uk anyhow) annual Company returns, maintain an office - it goes on and on. Then by no means the smalest problem, is Shutting it all down again. !
Jeez you’d need to be knocking out some big numbers to make that all worthwhile !
Martin_K- I am not looking to trade for anyone else but myself. I do not know how it is in Australia, but here, at least, in my area, there are no accountants or tax professionals that will see you for free.
I am asking here because I want to see how other traders deal with this issue. And as for skipping taxes, that is a joke. I would never do that. No amount of money is worth going to jail.
eddieb- Thank you!
Trader and Falstaff- Good points and I am still researching this. I have seen other people, self employed, do something similar. Again, I have done nothing of the sort yet. I have not put a dime in the market yet because I wish to have everything planned before risking anything.