August 17, 2011: Rise of the Planet of the IRS– Bad Trader Status Advice Leads to Losing Battle for Supremacy in Tax Court!

Could the IRS really be a team of Apes engaged in an onset of war for supremacy with human taxpayers? In the new blockbuster film “Rise of the Planet of the Apes”, genetic engineering leads to the development of intelligence in apes and the onset of a war between Apes and Humans. In the real world, day traders and investors attempt to conquer the IRS by meeting “Trader Status” and reap all valuable tax benefits, including the privilege to make the Mark-to-Market accounting election. But does this make the IRS the “Damn Dirty Ape’s” of the real world? Do we, as traders, put ourselves at risk? Shockingly, the true primate in my tasteless parody is not the IRS or the taxpayer, but the so-called tax professionals who lack the proper knowledge and training in trader taxation. More>>

January 24, 2011: Executive Summary of National Taxpayer Advocate Report to Congress: How a Self-Prepared Tax Return Could Be Costly.

The Executive Summary of National Taxpayer Advocate 2010 Annual Report to Congress, compiled from IRS data by Nina Olson, showed that taxpayers and businesses spend 6.1 billion hours a year complying with tax-filing requirements. To place this in context, it would require more than three million full-time employees to work 6.1 billion hours. This makes “tax compliance” one of the largest industries in the United States. More>>

November 11, 2010: Lame Duck Session Report: Proposed Tax Law Changes and How They Might Affect You.

With the House passing H.R. 5297 (Small Business Jobs Act of 2010) on September 16, the President is set to sign the bill to help out the businessman/woman as soon as it reaches the White House. With so much uncertainty surrounding the tax laws, what if any, hope can be derived from this bill? More>>

September 29, 2010: Small Business Jobs Act of 2010: Thousands in Tax Savings for Day Traders Who Mean Business!

With the House passing H.R. 5297 (Small Business Jobs Act of 2010) on September 16, the President is set to sign the bill to help out the businessman/woman as soon as it reaches the White House. With so much uncertainty surrounding the tax laws, what if any, hope can be derived from this bill? More>>

September 7, 2010: Trading Success: Proper Business Formation, Fast Lane to Profitable Trading!

Being in the business of specialized accounting for traders, we see all types of strategies used - in every financial sector and market. The amount of trading capital, frequency of transactions, and sector varies from one client to the next. Surprisingly, these factors are not what separates our consistently successful clients from the rest. We’ve discovered the most common attribute that cultivates trading success is those who treat their activity as a business. More>>

August 25, 2010: Nasty IRS Surprise: Failed Day Trader Loses It All and Receives a $172 Million Tax Bill!

Esparza Bofill, learned the hard way that “out of sight, out of mind” is not a phrase that describes our tax enforcement agency. Common sense may have told the 25-year-old Spanish immigrant that no income means zero income tax. For seasoned traders, however, Mr. Bofill’s problems are a staunch reminder that “common sense” should never be used in conjunction with the phrase “trader taxation”. More>>

June 16, 2010: My New Trading Business Has No Income. Do I Still Need to Worry About Bookkeeping?

Even if you have not generated an income from trading, staying on top of bookkeeping for your trading business is the only defense your business has against the IRS. If you have time to do your books over again, you have time to do them right the first time. Keeping track of all business expenses is easier to accomplish as it is happening instead of trying to go back a year later and remembering what you did. The last hurdle is knowing what expenses are actually deductible for your trading business. More>>

May 11, 2010: Claim Your Money Now! Discover the Cure for Costly Mistakes and Bad Tax Advice.

Ah, with a sigh of relief... your tax returns were prepared and filed with a warm cozy feeling of comfort knowing you saved the maximum amount of money legally allowed. Your accountant or tax software program sought out all available deductions and credits so its time to relax and enjoy the refreshing calm of summer. Wait... stop the music... remove yourself from the inviting pool water... grab a towel... set down the ice tea... Are you sure that warm cozy feeling is from taxes or the warm summer air? More>>

April 19, 2010: Like a Defective Seatbelt: Your Limited Liability Company’s False Sense of Security!

The extremely fashionable and single most powerful asset protection tool, the Limited Liability Company… Like most Americans, there is a good chance you have repeatedly heard advertisements about the benefits of an LLC to protect your most precious assets. Yet have you ever taken the time to research how an LLC stands up to IRS and/or civil court proceedings? In all likelihood, probably not… why would you? Your illzoom.com or “online document mill” sales rep is looking out for your best interest. More>>

April 12, 2010: Do I Meet the Guidelines for Trader Status or Trader in Securities?

Do I meet the guidelines of Trader Status or Trader in Securities? Well.. um.. sure... after all I am a day trader, right? Unfortunately, your tax professionals guess could be as good as anyone's regardless of what you may have been told or even sold! Don't allow a logical premise to guide you straight into tax court. By doing so, the next trader tax court case could be "Commissioner vs. [Your Name]"! Many traders, as well as CPAs, have spent countless hours researching the subject of trader status - to no avail. Why? Because there is no concrete IRS code or regulation outlining the definition of Trader in Securities. More>>

April 8, 2010: Practical Tips for Avoiding the April Rush While Reducing Your Trader Tax Bill.

If you were to ask my children how many seasons there are their answer would come with no hesitation, FIVE – spring, summer, fall, winter, and tax. They know the drill – long hours and full concentration on reducing our client’s tax burden. But does the tax season have to be about rush, rush rush? The IRS thrives on trader tax complexity and as a trader; your largest expense is your tax bill. As my children even say, haste makes waste. So why risk thousands of dollars rushing through such complexities? Here are some useful tax tips you should know as the deadline approaches rapidly. More>>

April 1, 2010: I Lost Money, How Can I Owe Taxes? The Answer is Simple, Wash Sales.

If there is a loss on the sale or disposition of stock or securities, the first thing the IRS will look at is if a substantially similar stock or security was purchased 30 days before or 30 days after that sale or disposition. If there was a purchase of that stock within that time frame, the loss that was incurred will be added on to the purchase price of that stock. Because the loss is added to your basis, you will eventually be able to take the loss. Talk about complicated. Recordkeeping alone could become a nightmare. More>>

March 15, 2010: Futures Taxation - All Futures Contracts Explained.

During my past crusade to become a proficient and profitable futures trader, I learned the distressing reality that the term “derivative” meant less to my so-called tax professional than it did to my six-month-old daughter. Unfortunately, I was not able to focus solely on becoming a profitable futures trader. At tax time, I was left to the arduous task of researching the difference in taxation of each futures contract. I was amazed to find that the tax treatment was based on three variables; the underlying asset, if it was exchange regulated, and if I met the classification of a dealer. More>>

February 15, 2010: Why do Taxes on Forex Seem so Foreign?

It is no wonder that the taxation of foreign currency trading is so confusing. After all, understanding the fundamentals of the currency markets are confusing alone without the right trading education. Add a little dash of “modern day” taxman bureaucracy and voila, you have two very different tax code sections. Knowing the specifics about what you trade will better help you determine how your Forex trades are taxed. More>>