How Traders Maximize Tax Benefits Q&A

24 Jul

Jul 24, 2023 at 12:00 pm EST


Join host Robert A. Green, CPA of Panelists include Darren Neuschwander, CPA, and Adam Manning, CPA, Managing Members of Green, Neuschwander & Manning, LLC, a CPA firm focused on traders.

We’ll spend about 15 minutes on the below content and 45 minutes on Q&A.

Active traders who qualify for trader tax status (TTS) are entitled to significant tax benefits:

– TTS traders can deduct from gross income business expenses of all stripes.
– They can elect mark-to-market accounting (Section 475 MTM) to avoid wash sale losses on securities and navigate around the $3,000 capital loss limitation – tax loss insurance. They can be eligible for a 20% deduction on qualified business income (QBI) if profitable.
– Traders can arrange health insurance and retirement plan deductions (employee benefits) using an S-Corp to pay officer compensation, which creates the necessary earned income component.
– In about 29 states, TTS pass-through entities can utilize the state and local tax (SALT) cap workaround solution to avoid the $10,000 cap on SALT itemized deductions.
– Investors can’t arrange any of the above tax breaks but enjoy long-term capital gains rates and lower 60/40 capital gains rates on futures (1256 contracts).

About GreenTraderTax and Green, Neuschwander & Manning, LLC:

If you can’t join us live, register and you will automatically receive a link to the recording after the session ends. You don’t have to be a client of IBKR.