Page 166 - Ultimate Guide to Currency Trading

Tax and Business Considerations

Taxes can bring terror to even the most hardened of traders. The best solution to the tax time
problem is to keep good records. And get a good accountant. You might open up a separate checking

account for the purpose of buying all of the newspapers periodicals and cups of coffee that go into
getting up to speed to buy and sell currencies.

If you keep it in your mind that you will be running your currency trading endeavors like a
business, then you will have the right ideas when it comes to record keeping. Be aware that all of the

income and interest that you make will probably be recorded and forwarded along to the IRS. In order
to combat the effects of your winnings on taxes you will need to keep all of your receipts that relate to

the running of your currency trading business.
This includes working out a plan with your accountant in regard to the number of deductions

you can take for the costs associated with your home office (if you have one) as well as any portion of
utilities you can attribute to FX trading. Other things to include are the costs of any computer

hardware, smart phone, and iPad. You might also want to talk to your accountant about the possibility
of expensing the cost of any coffee and meals out that you might have paid while working on your

trading outside your office.
Of course the cost of trading school and even this book should be considered when you are

getting together the costs of doing business.

Running your trading activities like a business means keeping track of income by periodically
printing out screen shots of your accumulated profit and loss statements, and if possible, resetting
them to zero at the first of the year. It also means that you will be trading for profit, as business only

exists to produce a profit!