US Taxes on trading profits

Discussion in 'Stock Market Education' started by Gomer, Feb 12, 2014.

  1. Gomer

    Gomer Well-Known Member

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    This my first year trading, and I'm up about 350%.... ( I love biopharms ).

    My question is regard to US taxes that I will have to pay as a US citizen. I realize that of my sold stocks I will have to pay about 30%. Here is my question-

    What can I use as deductions against these profits?-

    Laptop purchase?
    BioMed subscriptions?
    blackberry data plans?
    Dish Network Costs?
    Home Office Space, etc.?

    Thanks for your help.
     
  2. firelily99

    firelily99 Well-Known Member

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    Excellent question and one that I am very interested in hearing some answers about. I'm taking a cautious approach to my investing and am trying to gain as much knowledge as I can before I invest more heavily.
     
  3. JR Ewing

    JR Ewing Super Moderator Staff Member

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    350% your first year, huh? :D

    You can write off $3k in realized losses. And if you're doing it as your primary occupation, you may be able to write off expenses associated with your investing such as purchases of office equipment, software and educational materials, etc. Check with your tax advisor.
     
  4. firelily99

    firelily99 Well-Known Member

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    Thanks JR, I had been wondering what I could write off for a home based office. It is my primary occupation but its not exactly lucrative, I barely break even each month.
     
  5. Stacked

    Stacked Active Member

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    I think earnings will be taxed as normal income but I could be wrong.
     
  6. Trooper

    Trooper Member

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    Although it's slightly off topic, have you considered selling your Biopharms stock? It seems in a bit of an eventual decline to me considering generics manufacturers are catching up pretty quick.
     
  7. crimsonghost747

    crimsonghost747 Senior Investor

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    Seeing as it's your primary occupation, I'd try getting at least 50% on things such as data plans etc. If you have subscriptions to any investing related magazines etc, those should be able to be deducted too at 100% As for the bigger ones such as a laptop and home office space etc, from my experience (outside of the USA though) you have to have a pretty decent amount of transactions and enough money to make it actually look like a full time profession.

    Not sure how it's in the USA, but I imagine that you apply to use these as deductions and it either gets accepted or rejected? In that case, doesn't really hurt to try putting anything investing related there.
     
  8. Abqu

    Abqu Well-Known Member

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    If you're concerned about it, I would contact someone who specializes in this area. I'm sure you can find a tax specialist who can advise you better than we ever could, and isn't that the safest way to go?
     
  9. turt

    turt Guest

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    Well, I'm not sure how this situation would work since you are investing. I run a business so I can write all of these things off but I have no idea how you'd do it with out a 1099.

    Most brokers report the tax on a different form. 1040SE is for self employed.
     
  10. Investor

    Investor Well-Known Member

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    <br>
    Haha, I love your response, in fact, your response seems quite credible because as a tax payer, you are allowed to lessen your tax liability by deducting certain expenses that you incurred as a result of realizing your profit. Going to a tax advisor is definitely not going to be cheap, but if you can afford to go there once and learn everything that you need to know in order to be able to do your deducting yourself, by all means, go!
     

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