How Traders Use LLCs to (Legally) Save $69,000/yr on Taxes

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2 ай бұрын

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Пікірлер: 241

@skillet3753 2 ай бұрын

Saving this video for 3 years later when im finally profitable😅

@samuelmayo6566 Ай бұрын

Me too.

@The.Harsh.Truths 27 күн бұрын

Newsflash. You’ll never be profitable. 95% of retail traders lose money. But keep giving this guy views.

@tonyfu7695 27 күн бұрын

That’s an ape there!

@JovannyLazaro 18 күн бұрын

After 4 years now I need to learn how to pay less taxes legally

@BasicFolders 2 ай бұрын

THIS IS AWESOME!! This is one of the subjects that's barely covered on KZfaq... at least to the extent that it deserves. Thanks for this! ❤

@davyjones9595 Ай бұрын

Very interesting thanks for the advice. The problem is finding a CPA that actually knows the code for traders

@tootory9506 2 ай бұрын

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!

@jordanodonnell7807 Ай бұрын

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.

@archetype1987 2 ай бұрын

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.

@GoldenEagle7 2 ай бұрын

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 !!

@Giggidygiggidy12 Ай бұрын

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

@zeusinferno1223 Ай бұрын

😮😮😮😮

@MR.Cameroon1993 2 күн бұрын

Thats why I havent incorporated myself

@ukobassey2517 2 ай бұрын

Genuinely appreciate your help with this 🙏

@headlibrarian1996 Ай бұрын

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.

@bradclark2922 Ай бұрын

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.

@phyllisfeliciano5883 27 күн бұрын

Thank you

@cody0006 14 күн бұрын

that was extremelly informative thank you for sharing

@shyamvai 13 күн бұрын

Wow

@tomlorenz4344 6 күн бұрын

If you work from home as a trader, a company vehicle will be highly scrutinized. Expenses must be reasonable for the particular business.

@bradclark2922 4 күн бұрын

@@tomlorenz4344 Not anymore. The Chevron doctrine was just overturned by the Supreme Court. It's no longer up to the agency for interpretation. If it's allowed by the tax code, then so be it.

@cybermiketrading 2 ай бұрын

Needed this, thank you brother. This is phenomenal information 🔥

@dejayvanhorn8685 2 ай бұрын

Thank you so much Ross for sharing your knowledge and wisdom. Much appreciated

@biggcurv87 2 ай бұрын

Thank you so much for the info you shared 🎉👊👊

@jerryware1970 Ай бұрын

If you trade futures you’re taxed at 60% longterm capital gains rate and 40% short term rate…up to top marginal tax rate.

@apoc1211 Ай бұрын

Help

@IamFluffY90 2 ай бұрын

Ross has been looking at my search history... I was literally looking up trading as an LLC vs S-Corp last night

@johnnydominos 2 ай бұрын

Ross, it's 59 1/2 and you must have the roth ira for 5 years. good info, thank you.

@davidgutierrez1319 2 ай бұрын

Yes! Thank you for sharing your knowledge ross

@METSHAYQ21 2 ай бұрын

Thanks Ross for the awesome video. Could you please do another video on how to trade with IRA account?

@deleongirl72 2 ай бұрын

THANK YOU 🙏🏼 for covering this topic in trading. Will save it for when I get there 😊 sharing it with others.

@MrJupton1 Ай бұрын

Efing Great Video! Great Info Ross!

@MrJupton1 Ай бұрын

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

@bsfreak697 Ай бұрын

Much needed content, thank you!

@BIGCAT-1985 Ай бұрын

Thank you for sharing. Love this video!!!

@blockchaindomain2226 2 ай бұрын

now... if only I could make 100k a year instead of loosing it... LOL....

@Cooldadkev 29 күн бұрын

Thanks Ross love the video well explained!! Thank you 🙏

@Waytooold848 Ай бұрын

Love your channel, man. Helps a lot

@Michael_English87 2 ай бұрын

I've been waiting for this video Ross!

@bryonseilerXauBry0716 2 ай бұрын

Okay. You earned another subscriber😊

@gregstertrades 2 ай бұрын

Awesome video-great info- thx. Ross

@dr.tonyratliff8558 2 ай бұрын

Awesome information. Thanks

@JWnFlorida 2 ай бұрын

Great information.. Great share.

@RislinMLG 2 ай бұрын

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.

@headlibrarian1996 Ай бұрын

After tax contributions can be 100% of W2 box 1, or the annual limit, whichever is less.

@shyamvai 13 күн бұрын

Deferral?

@headlibrarian1996 13 күн бұрын

@@shyamvai "Employee deferrals" are what the tax code calls 401k contributions by paycheck deduction.

@pedropablopimientaperez96 2 ай бұрын

Great info Ross!

@rramach9091 Ай бұрын

Thank you so much. Very helpful

@dakel7 2 ай бұрын

This is great info, thank you!

@BrettM2014 2 ай бұрын

Are you able to depreciate the equipment over several years or just the year the equipment is purchased?

@dakel7 2 ай бұрын

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?

@SBayne762 4 күн бұрын

This is a great introduction to the various facets of taxation for people that undertake the difficult profession of trading. No matter what though, remember it is not a viable defense in an audit situation to say, "But Ross said so!" Please people, consult a licensed tax professional and understand that the IRS (through legislation and voluminous legal precedent) ultimately hold you responsible for your own tax return. Rock on!🤟

@DarkBullCapital 2 ай бұрын

awesome info

@JohnMCPA 25 күн бұрын

Careful differentiating S Corp election for a C Corp vs S Election for an LLC. They are the same. However, a single member LLC that does not elect S must file on Schedule C of the 1040 personal return which would be subject to the 15% SE tax. Also Lots of people think incorporating in a particular state can be state tax favorable. Unfortunately, the income is supposed to taxed in the jurisdiction in which it was earned... A K-1 distribution from an S Corp is taxed at your normal earned income rate when it flows through. Generally, you have good ideas; we just need to be sure to continue to protect the public which you did nicely by recommending many times your listeners seek a qualified CPA. Good stuff! Love the 401k and Roth ideas! (Also look up setting up a living trust and using a "back door 401k"

@sumitomoO0O 17 күн бұрын

Do you have any tips for W2 earners whose primary income is w2 but they also make trading income close to the w2 income? My w2 income makes me ineligible for roth IRA account, so that option is off the table.

@CR-dp2qg 2 ай бұрын

Muchas gracias!!!! Great information!!!! Thank you

@jstreett1 2 ай бұрын

Awesome video! Thank you!

@billydanzz 2 ай бұрын

IRS Section 1256

@katomane6116 Ай бұрын

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

@snuff43 2 ай бұрын

Great video. Does qualifying for Trading Tax Status change the type of entity?

@vBabywipes 2 ай бұрын

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

@anishjariwala2584 27 күн бұрын

amazing- THANK YOU

@TheYungsimba21 3 күн бұрын

God bless you !!!

@timreynolds2264 2 ай бұрын

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?

@Overland_Story 2 ай бұрын

What the app should I use for set up?? Quick books, ADP? Or maybe other applications? Thank you

@sunelsnn 2 күн бұрын

The employer match is limited to 25% of the reasonable compensation. so you'd need to pay yourself 180k or so in W2, to get 45k employer contribution and 23k on employee contribution. it's not like you can just divert all of the business cash to 401k.

@uniquecintron3119 Ай бұрын

So you start the s-corp but your trading isn't profitable how do you assign s salary when it's in the red

@galactic25 2 ай бұрын

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?

@tomlorenz4344 Ай бұрын

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.

@sumitomoO0O 17 күн бұрын

@tomlorenz4344 17 күн бұрын

@@sumitomoO0O make sure to hold investments long right to have them taxed at the long term capital gains rate. Buy growth stocks that don’t pay dividends and hold them until your retirement and are in a lower tax bracket

@allanultimate Ай бұрын

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 ?

@StevenStawiarski-sb1bx Ай бұрын

Why not a Roth IRA? You can trade futures like the emini contract but you do it through a custodian, no taxes on earnings

@FrostyPumpernickle 2 ай бұрын

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

@michaelferreira2651 2 ай бұрын

If you use S corp, can you use MTM accounting even if you don’t qualify as trader by IRS?

@RTRT-jr8jv 2 ай бұрын

Great info, thank you! Is the level of asset protection the same for S-Corp and LLC or is one better than the other?

@DaytradeWarrior 2 ай бұрын

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.

@VisionClearly Ай бұрын

Should that say, "with an LLC" instead of "escort"?

@TradeItUntilYouMakeit 2 ай бұрын

Whats leftover to keep in your account to compound growth if its all taken out?

@iosiftimofticiuc9043 2 ай бұрын

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?

@peterhaywood4111 2 ай бұрын

If i hadn't subscribed previously (actually I had) I'd certainly subscribe after this episode. Many thanks!

@true.fame. Ай бұрын

this is GOLD!!!

@user-rl5yy6qi8h Ай бұрын

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

@c0t556 16 күн бұрын

Thanks for the great video! Can I also deduct tax if I use my LLC or S corp to pay medical insurance for myself as an employee?

@FaignDaeth 13 күн бұрын

Title: LLC. Video: S-corp 😂

@ekdmes 2 ай бұрын

Thank You ❤

@jaro2450m 2 ай бұрын

And you got a new subscriber and thumbs up

@elliotthall5543 Ай бұрын

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.

@RealPhilTrades 29 күн бұрын

Ross, thanks for the awesome video. I'm always wondering how much trading I should do before I start, or if a minimum number is required. Obviously, if I make $1000 a year and write off $10,000 in expenses, something is off. I'm slowly becoming more and more profitable and I'm not sure when to make this leap. Thanks in advance to anyone who comments.

@certifiedfinest5065 2 ай бұрын

Can we do vehicle purchase deduction used for driving to store for office supplies etc?

@brandonnguyen1486 Ай бұрын

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?

@phyllisfeliciano5883 27 күн бұрын

Thank you

@TheFilipinoChannelinU.S Ай бұрын

Hi Ross, do they need receipt for expenses in taxes?

@LD32. 2 ай бұрын

wow Ross, THANK YOU

@Firemedic2105 2 ай бұрын

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.

@certifiedfinest5065 2 ай бұрын

Does mark to market allow for the same deductions an LLC would?

@Firemedic2105 Ай бұрын

@@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.

@evalsgpar6840 Ай бұрын

This should’ve been your first tutorial video

@sumitomoO0O 17 күн бұрын

Do you have any video for W2 earners whose primary income is w2 but they also make trading income close to the w2 income? My w2 income makes me ineligible for roth IRA account, so that option is off the table. Also, the expenses for computer, desk etc is one time, you dont buy those every year.

@Fact_Check77 Ай бұрын

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.

@YaSoFine 2 ай бұрын

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!

@shyamvai 13 күн бұрын

Wouldn’t that be an expense that you can write off too?

@Romariobruno245 Ай бұрын

Please what broker or platform i can use unided states after i get my s Corp.

@riteshpatel309 Ай бұрын

How much we pay to open S Corp and how much accountant charges monthly yearly?

@r.c.3744 Ай бұрын

Great video thank you!! Do you have a video on how to setup a scorp for traders?

@DaytradeWarrior Ай бұрын

That is a better question for a CPA.

@Z.H.Trading 2 ай бұрын

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

@DaytradeWarrior 2 ай бұрын

At that time I might help grow my children’s accounts or do something like that.

@Z.H.Trading 2 ай бұрын

@@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

@galactic25 2 ай бұрын

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?

@VisionClearly Ай бұрын

Good question!

@robertgordon4757 Ай бұрын

Re: Solo 401(k). Might want to double check the rules about having an employer match in your solo 401K.

@johnthomasii943 2 ай бұрын

Great video! Can I still get a 2 week trial?

@nicolepapageorge9727 26 күн бұрын

So I just opened an llc and very beginner-can these not be deducted unless an S Corp?? If I project to be under $100k should I convert to S Corp?

@ciacasupreme Ай бұрын

🙏🏿 thanks

@victorestevez7809 2 ай бұрын

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!!

@DaytradeWarrior 2 ай бұрын

I’ve had this trouble too with some banks, just keep shopping around

@DrFarris 2 ай бұрын

I did it under a c corp, but an llc works fine

@katomane6116 Ай бұрын

Bro I don’t know who cooked harder , you or Kendrick 😂 🔥🔥 thanks for sharing.

@boyard0z570 2 ай бұрын

Would any of this be tangible with an offshore trading account? Or does this only apply to American accounts?

@DaytradeWarrior 2 ай бұрын

You would have to check with a CPA, though the assumption would be that the broker location doesn't matter.

@UsefulElectrons-ni1fq Ай бұрын

Where does the business get its initial finances to trade with

@nitroice7108 Ай бұрын

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.

@d.keithshores4500 2 ай бұрын

When trading out of the Roth, that Roth account is under your S Corp correct not your personal Roth

@DaytradeWarrior 2 ай бұрын

A Roth is in your personal name

@j-vx3pu 6 күн бұрын

Hi Ross, thank you so much for your content. This is my first year of investing and I would have never thought about ways to pay less income tax. My investments are currently under my name, do you know if I can set up an s-corp and transfer my investments into it?

@DaytradeWarrior 6 күн бұрын

We'd recommend reaching out to a CPA or accountant for help with this.

@Alex-Music639 25 күн бұрын

s-corps don't protect you from personal liability or bankrupty...... because, WHO owns the company? It's you personally as the shareholder, so your shares are worth something (assets-liabilities of the s-corp)

@bryonseilerXauBry0716 2 ай бұрын

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.

@DaytradeWarrior 2 ай бұрын

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