This question is for anyone who trades under a corporate entity rather than in their personal name.
If I were to incorporate and trade under that corporation is it necessary to get a tax id? Or is that a must in order to get the tax benefits?
Thank you.
Gravitas
I just went through the whole process of filing and setting up my account under the name of my LLC in hopes to get a tax break and open up new opportunities for the future. I have been told that if you are the only one working under your business, i.e. you are not hiring anybody then you can just file your taxes for your business along with your personal taxes and do not need a EIN. You will still get the tax benefits.
Something else to think about though, in order to open a corporate trading account with many brokers, they will require you have a business bank account and in order to get a business bank account the bank will require you have the EIN.
If you are looking to trade other’s money, acting as a CPO, CPA, IB, etc then you should look to get an EIN because that will help keep your personal and business entities separate and will prevent you losing personal assets in the event one of your investors decides to take legal action against the business. This is after all, why you filed as a corporation, to enjoy the liability protection that is inherent in it.
Hope this helps and please if anybody else sees flaws in my write-up, please point them out or add to it.
Thank you
racerdude777
Thanks so much! That helps a ton.
Take it easy.