Forex and Tax

[darkman]

Hi All,
I just started trading and was wondering about the tax consequence. I'm currently without a job right now. Does anyone have information pertaining to how tax is filed with forex trading? If I make hundreds of trades a month, I'm not sure how filing tax would work. Please any tips would be helpful.
Thanks and happy trading!

[1ahkalg]

Hi Darkman,

I'm in my second year of trading full time. My suggestion is to seek professional help. There are man benefits you can receive if you know how. Also, different personal circumstances can play a role in what is best for you. In my situation I am setup as an
S Corporation because it allows me to separate what I actually pay myself from the dividends my company earns. Whatever you decide to do, ask someone if incorporating is right for you. You can save a decent percentage from just being a Sole Proprietorship. I hope this helps. Good Luck with your trading...

[darkman]

Thanks for the good tip 1ahkalg! I really appreciate it. I'm guessing I need to find a good CPA. sounds like a logical plan is to incorporate, or maybe form LLC. I'd like to send you an email with just a couple of questions, if that's ok. I will understand if you don't have the time to answer my questions. Thanks so much again for your advice.
Good trading!

[Truville]

Does your broker even report your earnings at all?

[darkman]

I assumed that they do but I'm not certain. I should find out for sure. Is it a common practice that brokers don't report or Do you know of brokers that don't report earnings?

[Truville]

I have no idea whether it's common or not. All I know is, you don't remind the teacher that she forgot to give out today's homework. Know what I mean?

[darkman]

True indeed! Although if I skipped class and didn't do my homework that might not be good either. I'll check with the broker to be sure.
Thanks for the tip

[Truville]

Darkman,

I'm an organic chemist, so I like to read about scientific history.

Did you know that at one point, LSD was legal? Legal to make, sell, and use. No biggie really. People would drive around in busses, selling for a buck a hit. 200 mikes for a buck, which was cheap even in 1960's dollars.

So why did it eventually get banned then? Too many users, too much publicity, too many people talking about it in the open. When it's a counter-culture, underground thing, not enough people cared to do anything about it. But when people starting talking about it openly, making waves, the government finally was forced to do something about it. Now, it's illegal. What once was a legal (if clandestine) activity is now under government scrutiny, because they were "asking" the wrong people, because people who receiving a benefit couldn't keep it under wraps.

Catch my drift?