How Traders Use LLCs to (Legally) Save $69,000/yr on Taxes
ฝัง
- เผยแพร่เมื่อ 28 เม.ย. 2024
- Want to Learn More ❓❓ Get info on My Strategy and Courses here: www.warriortrading.com/tradin...
Before we continue...👀
💰Remember, day trading is risky and most traders lose money. You should never trade with money you can’t afford to lose. Prove profitability in a simulator before trading with real money.
❗❗My results are not typical. We do not track the typical results of past or current customers. As a provider of trading tools and educational courses, we do not have access to the personal trading accounts or brokerage statements of our customers. As a result, we have no reason to believe our customers perform better or worse than traders as a whole.
❌Do not mirror trade me, or anyone else. Mirror trading is extremely risky www.warriortrading.com/why-mi...
🍏 All of the content on our channel is for educational purposes only. No data, content, or information provided by Warrior Trading, the Site, or the other products and services of Warrior Trading, is intended, and shall not constitute or be construed as, advice or any recommendation to buy, sell or hold a particular security or pursue any particular investment strategy.
✔️If you don’t agree with those terms and our full disclaimer - www.warriortrading.com/discla... - you should not continue watching our videos.
Still with me?
Now let’s dig into some helpful information …
What’s my story? ✏️ You can read it here: www.warriortrading.com/ross-c...
And check out my broker statements here 📝 www.warriortrading.com/ross-c...
Our website is filled with free info 🔎 Start with this guide, no opt-in required: www.warriortrading.com/day-tr...
Learn about my stock selection process, how I determine entries/exits, my strategy, and more in my free class 💻 Register here: www.warriortrading.com/free-d...
Wondering what I think the All Star Day Traders out there have in common? 🏆 Read this blog I wrote www.warriortrading.com/all-st...
#daytrading #warriortrading #rosscameron #stocks #learntotrade
Warrior Trading // Ross Cameron // Day Trade Warrior - บันเทิง
![[Full Episode] MasterChef Junior Thailand มาสเตอร์เชฟ จูเนียร์ ประเทศไทย Season 3 Episode 1](http://i.ytimg.com/vi/Qs5zdBqLn_8/mqdefault.jpg)
There are much more deductions for an S Corp besides the things Ross mentioned, great video by the way. Your vehicles can be purchased (company vehicle) in the corp and completely deductible, including gas, insurance, tag, etc. Also, you can depreciate the vehicles for a further deduction. Corporate officers are also allowed a housing allowance, meal allowance, some entertainment allowance, etc. You don't have to be rich to pay little or no tax, you just have to do your research and be smart about it.
Saving this video for 3 years later when im finally profitable😅
Me too.
LLC is a state concept, while S corp is IRS concept. so you can have an LLC and file your tax as S Corp. an LLC can elect to be taxed as an S corporation by filing Form 8832 (Entity Classification Election) to be treated as a corporation for tax purposes, and then filing Form 2553 (Election by a Small Business Corporation) to elect S corp status.
I have been told that one cannot do Trading or Generate Investment money from Stock Market, under S-Corp. The income generated by S-Corp is treated as Capital gains and is passed to the S-Corp officer.
No deductions are taken against trading or investment income
Thats how my account has filed my taxes for last 3 years.
Only C-Corp capital gains are treated as income and deductions are used. Can someone please explain?
Yeah… this fellow is conflating legal structure (Sole Proprietor vs LLC vs Corporation) and tax status election (disregarded, partnership, S Corp, C Corp). LLC in some states is $0/yr and zero annual filings; not so for a corporation.
Having income flow through a business entity is a smart move because you can write off expenses that you can’t individually.
At least he nails the Solo 401k loophole, which is a huge one. And focusing on Roth investing.
But screw the nit-picking itemized deductions… go for the Section 230A exemption and rent your whole home to the business for 14 days a year - deductible expense, tax-free income up to 14 days.
FWIW, Anderson Advisors is a great resource for this kind of legal and tax advice.
Dont forget there is Rule 72(T), which allows you to take contributions before 59 1/2, but you must make them on a consistant basis that is approved by the IRS. So to get contributions for $3,000 a month with a seven figure account, would totally be do-able before 59 1/2.
The paperwork for LLC brokerage accounts is really annoying though. Far more intrusive than for personal accounts. Can’t really do it online, actual paper is required, with wet signatures. They want photos of your driver’s license even though they don’t for your personal accounts. Business checking accounts are the same way. You will pay substantial fees for market data too. Worth it in the end, but be prepared for it.
The other issue I didn't hear him mention is a brokerage will make you regoster as a professional trader if you try and setup your acct as an LLC or corp. Even if you are a newbie which means your trading fees are going to quadruple every month. So you better be making some serious profits before you do that or your going to be spending a whole lot on expenses if you are unprofitable
😮😮😮😮
If you trade futures you’re taxed at 60% longterm capital gains rate and 40% short term rate…up to top marginal tax rate.
Thank you, Ross for touching the subject. I have been searching for a detailed explanation. This is amazing. No other video I have seen on the Internet covers it this way.
Thank you so much Ross!! This is what I looking for in details ..Really no one giving these info like you doing as always .God bless you !!
Genuinely appreciate your help with this 🙏
THIS IS AWESOME!! This is one of the subjects that's barely covered on TH-cam... at least to the extent that it deserves. Thanks for this! ❤
We asked, and you delivered Ross!! 🥳
Thank you so much for this more in depth explanation on tax and saving. This is a great episode. I'll watch it five times..
And hope you make more like this!
Needed this, thank you brother. This is phenomenal information 🔥
Thank you so much Ross for sharing your knowledge and wisdom. Much appreciated
Love your channel, man. Helps a lot
Thank you so much for the info you shared 🎉👊👊
Thank you so much. Very helpful
Yes! Thank you for sharing your knowledge ross
Thank you for sharing. Love this video!!!
Ross has been looking at my search history... I was literally looking up trading as an LLC vs S-Corp last night
Awesome video-great info- thx. Ross
Efing Great Video! Great Info Ross!
Okay. You earned another subscriber😊
Great information.. Great share.
Much needed content, thank you!
Awesome information. Thanks
I've been waiting for this video Ross!
Muchas gracias!!!! Great information!!!! Thank you
This is great info, thank you!
Awesome video! Thank you!
Thanks Ross for the awesome video.
Could you please do another video on how to trade with IRA account?
Great info Ross!
Very interesting thanks for the advice. The problem is finding a CPA that actually knows the code for traders
THANK YOU 🙏🏼 for covering this topic in trading. Will save it for when I get there 😊 sharing it with others.
Ross, it's 59 1/2 and you must have the roth ira for 5 years. good info, thank you.
Not sure, but something to considered.... A "full time trader" under I R S classification have to meet certain requirements. IE Number of trades etc... Worth checking out before declaring sub chapter S status and being able to deduct biz expenses. If you don't meet their requirements deductions and biz expenses are a mute point. Just saying Worth verifying
awesome info
One thing to be csreful of here is that the amount you can contribute to the solo 401k is based on your overall compensation. You can generally only contribute up to 25% of your salary. So actually in your example of a 50k W-2, you can only do an employer match of 12.5k. However, you can do employee deferrals on top of this.
After tax contributions can be 100% of W2 box 1, or the annual limit, whichever is less.
Great video. Does qualifying for Trading Tax Status change the type of entity?
And you got a new subscriber and thumbs up
wow Ross, THANK YOU
IRS Section 1256
Are you able to depreciate the equipment over several years or just the year the equipment is purchased?
Thank You ❤
now... if only I could make 100k a year instead of loosing it... LOL....
QUESTION: Ross, Great Video but how to overcome the higher amount of data fees charged by brokerages once you establish a entity trading account (corp). The data fees (level 2 etc) is small or free for individual trading account but for a entity trading account brokerages charge nearly $1000 a month for the same data. HELP!
If i hadn't subscribed previously (actually I had) I'd certainly subscribe after this episode. Many thanks!
Great explanation 2 mins in and I finally have my answer . Just pay regular taxes at the end of the year until I make too much money 😂 thanks
Hi Ross, do they need receipt for expenses in taxes?
this is GOLD!!!
Do we need to file for Day Trader Tax status in the S corp? Or is just setting up the S corp all I need to do. Also did you do the S corp in Delaware?
Great video! Can I still get a 2 week trial?
hey ross! how much do you need to make annually for it to be worth creating a llc/scorp or how long would you need to be consistently profitable? im on the verge of profitability and want to make sound financial decisions
In the s corp pays you a salary, does it count as real income so you can pay medicare, ss? That will give you ss and medicare. There is a roth 401k?
What the app should I use for set up?? Quick books, ADP? Or maybe other applications?
Thank you
Hey ross im new to your channel but im wondering if you could go over this information but trading with a Prop Firm under an LLC, could this still work under that ?
The hard thing is to find a bank can approve the trading LLC.
Why not a Roth IRA? You can trade futures like the emini contract but you do it through a custodian, no taxes on earnings
Can we do vehicle purchase deduction used for driving to store for office supplies etc?
So you start the s-corp but your trading isn't profitable how do you assign s salary when it's in the red
Great info, thank you! Is the level of asset protection the same for S-Corp and LLC or is one better than the other?
With an escort, the income flows through to your personal tax return. With a s corp, the corporation would pay income tax on its profits if it has net profits and then you would also pay your taxes as an employee so you could have double taxation.
Should that say, "with an LLC" instead of "escort"?
Please what broker or platform i can use unided states after i get my s Corp.
Whats leftover to keep in your account to compound growth if its all taken out?
Also, what I see is that you can take the home office and other related expenses if you are a 475f marked to market trader. Why do you say you need a business entity like s-corp/llc for this reason?
This should’ve been your first tutorial video
What about Traders from outside the US. We pay taxes in US and then again in our country? And if we pay taxes in US, what do we pay exactly?
How much we pay to open S Corp and how much accountant charges monthly yearly?
If you use S corp, can you use MTM accounting even if you don’t qualify as trader by IRS?
HA! For a minute I thought you went British on me. It took a minute to get the gold reference. I'm sharp like that. HAHAH.
How much do I need to gross from trading to create an LLC? I was chatting with a close friend in my trading group about creating an LLC to trade under
Where does the business get its initial finances to trade with
Re: Solo 401(k). Might want to double check the rules about having an employer match in your solo 401K.
I am not sure this makes sense, the solo 401K would only work if you aren't already contributing the max $23000 per year through your normal day job. Would be great to work this up assuming someone has a day job that they are earning the majority of the living income on.
All the comments are saying nobody is making money, only losing money
That's why we need flat tax!!!
You cannot make contributions to an IRA with unearned income.
Can we still do this if we trade while at our day job that pays the bills, meaning I just day trade for a side hustle?
Bro I don’t know who cooked harder , you or Kendrick 😂 🔥🔥 thanks for sharing.
I did it under a c corp, but an llc works fine
An S-corporation with passive income is subject to passive income tax rules - you failed to mention this. A corporation forfeits its S-corp status on passive income exceeds 25% for 3 consecutive years.
I am quite confused and can you please explain.
I have been told that one cannot do Trading or Generate Investment money from Stock Market, under S-Corp. The income generated by S-Corp is treated as Capital gains and is passed to the S-Corp officer.
No deductions are taken against trading or investment income
When trading out of the Roth, that Roth account is under your S Corp correct not your personal Roth
A Roth is in your personal name
Too much hand waving for me. That home office expense as described will almost surely trigger an audit, plus it’s a highly bloated number. IRS will give you a standard deduction of $5/sq ft with 300 sf max, for a total of $1500. If you itemize, you can deduct up to 15% of the home expenses. Unless home expenses are $80,000 that $12 grand will look fishy. The $50,000 salary will still need to have the 15.3% social security and Medicare taxes paid one way or another. Also here in Florida we don’t have a personal income tax, but there is a corporate income tax of 5.5%. The one thing that might made sense is the solo 401k. Even then the 15.3% SEP must be paid on the employee part of the contribution. Even then, taxes are only deferred not avoided. Money taken from a 401k is taxed as ordinary income, whereas in an ordinary trading account there’s the opportunity for much lower long term capital gains tax rates. Also states often charge an annual fee just to have an LLC or corporation. In Florida it’s $150. Then there may be other local fees and license costs as well.
Thanks again great video! So, are you thinking when you reach 59 1/2 you trade fully out of the ROTH IRA and just money for cost of living, etc.? Then just collapse your S-Corp? Good stuff man thank you
At that time I might help grow my children’s accounts or do something like that.
@@DaytradeWarrior Great idea man. I'm a couple years away and making "okay" progress. 80% green days even small, so will start following the guidance for the ROTH and start building that out for retirement "help" in a few years. Bad choices from the start so really no retirement - I feel I have a light at the end of the tunnel. Thanks again
Can you itemize all your losses and write off losses?
What about prop firms (Apex, Topstep, etc)?
I too would like to know this. So far in my LLC, I've been expensing eval fees and booking payouts as revenue. Essentially, they are treated as my "client".
Great video thank you!! Do you have a video on how to setup a scorp for traders?
That is a better question for a CPA.
I have a Trading LLC and I’m having a hard time opening a Business Bank Account for my LLC in NYC. Any suggestions??? Thanks in advance!!
I’ve had this trouble too with some banks, just keep shopping around
Would any of this be tangible with an offshore trading account? Or does this only apply to American accounts?
You would have to check with a CPA, though the assumption would be that the broker location doesn't matter.
all im hearing is deferred taxes... example solo 401k and you still pay the taxes when you take it out.
Roth IRA is really the best if you don’t want to differ taxes. But differed is okay imo cause it lets you focus on growing your balance today.
Should worry about making money trading first. If you setup your account as a rollover ira and contribute 6k a year a winning trader hypothetically can grow that in no time and all tax is deferred. Many youtubers make more money via TH-cam and subscriptions than trading. I might fact check your llc foot example too.
funny, my cpa said i could not do this....i told him i believe you are wrong
I was wondering, others say you need a certain large capital requirement to open a trading account as a business; Webull’s is $100k. If you start an S-Corp, can you use it as your holding company for your individual trading account?
Good question!
LOL @ profit...
How does 'trader tax status' fit in with all this?
I wonder if you just reinvested the $25000 in a stock if you have to pay taxes. Because technically you have not made it, it was reinvested into coca cola or some sort of dividend stock. Like when you sale a house and reinvested in new house you don't pay taxes.
If I'm trading for a Futures Prop firm here in the US does having an LLC help or just applies for personal accounts??? Sorry if it's a stupid question.
I don’t think there’s as much you can do when you are trading from a prop firm because they’re not gonna let you book your income as business income
Guys. I have a good question. I have opened my LLC. We all is asking for minimum 50k to trade under LLC. Is this how it works? 50k is too much
what’s ur average hold times on ur winners. Would u ever hold longer then a minute?
Approx 5min for both
@@DaytradeWarrior ty, so u use ur 5 min chart to make entries not the one?
Personally I did a pass through LLC and realized that they make me pay professional market fees and that killed my profits!!!
Once I consistently make good money it's good, but I went back to trading outside the LLC and filed mark to market this April.
Does mark to market allow for the same deductions an LLC would?
@@certifiedfinest5065 sorry I just saw this. Yes it does. The key is filing before the April 15th deadline... which I didn't know to do when I first started trading.