|
|
|
|
|
Home > Finance > Taxes > Taxes for Day Traders and...
|
|
|
|
Taxes for Day Traders and Investors
|
|
Whether you are an active day trader or just put money into the market
for long term gains, taxes are something you need to address. The IRS
views traders and investors differently.
Taxes for Day Traders and Investors
As odd as it may sound, the tax code is fairly vague on the issue of
taxes for day traders versus investors. Alas, the IRS has instituted a
more definitive view on the subject. If you are unaware of the
differences, your tax return filings could end up getting you in a hot
spot.
Just so we understand what is being discussed, day traders and
investors are two birds of a feather. A day trader spends their days
trading stocks in short time increments. They are looking to profit
from quick movements in stock. They tend to win big and lose just as
big. Investors, on the other hand, tend to dump money into an account a
once or twice a month. They are buying stock with the idea that it will
gain value for them down the road in a few months or years.
As strange as it may sound, the IRS has looked to business to
distinguish between day traders and long term stock investors. Simply
put, the IRS views day traders as a small business, while those that
buy or sell stock less frequently are simply stuck with Schedule D
stock reporting. The difference may sound minute, but it matters from a
tax point of view.
Day traders and investors are both stuck with paying taxes on their
gains and dividends. Given the nature of the game, however, day traders
rarely have dividend income because they do not hold on to the stock
long enough. The real advantage for day traders, however, comes in the
additional expense department.
Since day traders are viewed as small businesses by the IRS, they can
deduct whatever any small business can. This includes expenses such as
those related to home offices, internet access, stock research costs,
utilities and so on. An investor cannot deduct these expenses in
relation to their investment activity. In simple terms, the day trader
gets to claim expenses on Schedule C, while the investor does not.
So, does this mean you should try to claim yourself as a day trader if
you trade stocks more than a few times a month? Well, you have to be
careful. The rule is unusually vague, even for the tax code. It states
that you must trade sufficiently frequently and substantially to be
considered a day trader. A better rule used by most accountants is to
only claim day trader status if the activity is your only job.
|
|
|
Please Rate this Article
|
|
|
|
|
|
|
|
Copyright © 2006 http://ArticleBusiness.net. All Rights Reserved. Partner sites: Noi
That, Dien thoai di dong, Du
lich, Thoi trang, Quản
lý cổ đông, Quan Ly Nha Hang,
Phan mem, Phan
mem, Phan mem viet nam
Phần mềm nhà hàng, Quản
lý nhà hàng, Diễn đàn ngân hàng,
Download phần mềm, Free
Article, Article Business, Global
in arm, Article Nutrition
article Confederation, Article
Find, Article News, Articles
Find, Article health, Article
Marketing
Phần mềm nhân sự Phần mềm bán hàng Phần mềm Khách sạn Quản lý khách sạn
Phần mềm diệt virus Download Firefox |Giấy Dán Tường | Giấy Dán Tường | Nội Thất Xuân Hòa| Nội Thất Hòa Phát| Nội thất 190 | Nội thất văn phòng | Bồn tắm cao cấp | Tủ bếp | Tủ bếp | Ván sàn gỗ tự nhiên | Rèm văn phòng | Giàn phơi thông minh | Thảm sàn | Thảm trải phòng | Thảm trải văn phòng | Trần thạch cao | Nội thất phòng khách | Thiết kế nhà | Giấy dán tường hàn quốc | Tủ bếp | Nội thất hòa phát | Nội thất xuân hòa | Rèm văn phòng | Giấy dán tường | nội thất hòa phát | Gan nhiễm mỡ | Tủ bếp đẹp | Vật liệu xây dựng | Vật liệu xây dựng hà nội | eglo | ván sàn | nội thất fami | Nội thất fami | Xuân hòa | Trần thạch cao | Thiết bị vệ sinh | Nội Thất Văn Phòng | Đèn Trang Trí | Thảm văn phòng | oto tải | Thiết kế xây nhà | Kiến Trúc | Đèn trang tríHoa trang trí | Sofa da | Sofa gỗ |
| Giấy dán tường| Giấy dán tường đẹp | Bàn để laptop | Học lái xe Học lái xe | Oto tai|Exchange sites: Contact Us (email: redbluevn@yahoo.co.uk)
|
|