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

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  • Опубликовано: 28 апр 2024
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Комментарии • 219

  • @skillet3753
    @skillet3753 Месяц назад +66

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

    • @samuelmayo6566
      @samuelmayo6566 25 дней назад

      Me too.

    • @The.Harsh.Truths
      @The.Harsh.Truths 17 дней назад

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

    • @tonyfu7695
      @tonyfu7695 17 дней назад

      That’s an ape there!

    • @JovannyLazaro
      @JovannyLazaro 8 дней назад

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

  • @BasicFolders
    @BasicFolders Месяц назад +23

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

  • @davyjones9595
    @davyjones9595 Месяц назад +9

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

  • @tootory9506
    @tootory9506 Месяц назад +7

    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!

  • @archetype1987
    @archetype1987 Месяц назад +5

    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.

  • @ukobassey2517
    @ukobassey2517 Месяц назад +4

    Genuinely appreciate your help with this 🙏

  • @Giggidygiggidy12
    @Giggidygiggidy12 Месяц назад +19

    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

  • @jordanodonnell7807
    @jordanodonnell7807 Месяц назад +5

    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.

  • @GoldenEagle7
    @GoldenEagle7 Месяц назад +5

    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 !!

  • @bradclark2922
    @bradclark2922 Месяц назад +23

    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.

  • @headlibrarian1996
    @headlibrarian1996 Месяц назад +7

    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.

  • @biggcurv87
    @biggcurv87 Месяц назад +2

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

  • @dejayvanhorn8685
    @dejayvanhorn8685 Месяц назад +1

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

  • @cybermiketrading
    @cybermiketrading Месяц назад +2

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

  • @BIGCAT-1985
    @BIGCAT-1985 Месяц назад

    Thank you for sharing. Love this video!!!

  • @bsfreak697
    @bsfreak697 Месяц назад

    Much needed content, thank you!

  • @dr.tonyratliff8558
    @dr.tonyratliff8558 Месяц назад

    Awesome information. Thanks

  • @MrJupton1
    @MrJupton1 Месяц назад +1

    Efing Great Video! Great Info Ross!

  • @gregstertrades
    @gregstertrades Месяц назад +1

    Awesome video-great info- thx. Ross

  • @davidgutierrez1319
    @davidgutierrez1319 Месяц назад +1

    Yes! Thank you for sharing your knowledge ross

  • @JWnFlorida
    @JWnFlorida Месяц назад

    Great information.. Great share.

  • @Waytooold848
    @Waytooold848 24 дня назад

    Love your channel, man. Helps a lot

  • @rramach9091
    @rramach9091 25 дней назад

    Thank you so much. Very helpful

  • @Cooldadkev
    @Cooldadkev 20 дней назад

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

  • @jerryware1970
    @jerryware1970 Месяц назад +6

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

  • @bryonseilerXauBry0716
    @bryonseilerXauBry0716 Месяц назад +3

    Okay. You earned another subscriber😊

  • @pedropablopimientaperez96
    @pedropablopimientaperez96 Месяц назад

    Great info Ross!

  • @deleongirl72
    @deleongirl72 Месяц назад

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

  • @CR-dp2qg
    @CR-dp2qg Месяц назад

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

  • @dakel7
    @dakel7 Месяц назад

    This is great info, thank you!

  • @Michael_English87
    @Michael_English87 Месяц назад

    I've been waiting for this video Ross!

  • @jstreett1
    @jstreett1 Месяц назад

    Awesome video! Thank you!

  • @DarkBullCapital
    @DarkBullCapital Месяц назад

    awesome info

  • @IamFluffY90
    @IamFluffY90 Месяц назад +6

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

  • @METSHAYQ21
    @METSHAYQ21 Месяц назад +2

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

  • @anishjariwala2584
    @anishjariwala2584 17 дней назад

    amazing- THANK YOU

  • @MrJupton1
    @MrJupton1 Месяц назад +3

    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

  • @johnnydominos
    @johnnydominos Месяц назад +4

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

  • @billydanzz
    @billydanzz Месяц назад +7

    IRS Section 1256

  • @snuff43
    @snuff43 Месяц назад +1

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

  • @RislinMLG
    @RislinMLG Месяц назад +8

    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
      @headlibrarian1996 Месяц назад +1

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

    • @shyamvai
      @shyamvai 3 дня назад

      Deferral?

    • @headlibrarian1996
      @headlibrarian1996 3 дня назад

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

  • @phyllisfeliciano5883
    @phyllisfeliciano5883 17 дней назад

    Thank you

  • @JohnMCPA
    @JohnMCPA 15 дней назад +1

    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
      @sumitomoO0O 7 дней назад

      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.

  • @ekdmes
    @ekdmes Месяц назад

    Thank You ❤

  • @BrettM2014
    @BrettM2014 Месяц назад +2

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

  • @dakel7
    @dakel7 Месяц назад +4

    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?

  • @blockchaindomain2226
    @blockchaindomain2226 Месяц назад +8

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

  • @jaro2450m
    @jaro2450m Месяц назад

    And you got a new subscriber and thumbs up

  • @TheFilipinoChannelinU.S
    @TheFilipinoChannelinU.S Месяц назад

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

  • @katomane6116
    @katomane6116 Месяц назад +1

    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

  • @johnthomasii943
    @johnthomasii943 Месяц назад

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

  • @ciacasupreme
    @ciacasupreme 21 день назад

    🙏🏿 thanks

  • @true.fame.
    @true.fame. Месяц назад

    this is GOLD!!!

  • @Overland_Story
    @Overland_Story Месяц назад

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

  • @vBabywipes
    @vBabywipes Месяц назад +1

    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

  • @LD32.
    @LD32. Месяц назад

    wow Ross, THANK YOU

  • @allanultimate
    @allanultimate Месяц назад

    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 ?

  • @TradeItUntilYouMakeit
    @TradeItUntilYouMakeit Месяц назад

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

  • @peterhaywood4111
    @peterhaywood4111 Месяц назад

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

  • @c0t556
    @c0t556 7 дней назад

    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?

  • @certifiedfinest5065
    @certifiedfinest5065 Месяц назад

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

  • @galactic25
    @galactic25 Месяц назад +1

    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?

  • @RTRT-jr8jv
    @RTRT-jr8jv Месяц назад +1

    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
      @DaytradeWarrior  Месяц назад +2

      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
      @VisionClearly Месяц назад

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

  • @timreynolds2264
    @timreynolds2264 Месяц назад +1

    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?

  • @FrostyPumpernickle
    @FrostyPumpernickle Месяц назад +1

    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

  • @iosiftimofticiuc9043
    @iosiftimofticiuc9043 Месяц назад

    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?

  • @StevenStawiarski-sb1bx
    @StevenStawiarski-sb1bx Месяц назад +1

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

  • @uniquecintron3119
    @uniquecintron3119 Месяц назад +1

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

  • @michaelferreira2651
    @michaelferreira2651 Месяц назад +1

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

  • @brandonnguyen1486
    @brandonnguyen1486 Месяц назад

    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?

  • @Firemedic2105
    @Firemedic2105 Месяц назад +5

    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
      @certifiedfinest5065 Месяц назад

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

    • @Firemedic2105
      @Firemedic2105 Месяц назад

      @@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.

  • @Romariobruno245
    @Romariobruno245 Месяц назад

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

  • @UsefulElectrons-ni1fq
    @UsefulElectrons-ni1fq Месяц назад

    Where does the business get its initial finances to trade with

  • @citylife3229
    @citylife3229 Месяц назад +1

    All the comments are saying nobody is making money, only losing money

  • @DrFarris
    @DrFarris Месяц назад

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

  • @evalsgpar6840
    @evalsgpar6840 Месяц назад

    This should’ve been your first tutorial video

  • @riteshpatel309
    @riteshpatel309 24 дня назад

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

  • @elliotthall5543
    @elliotthall5543 Месяц назад

    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.

  • @Z.H.Trading
    @Z.H.Trading Месяц назад +2

    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
      @DaytradeWarrior  Месяц назад +2

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

    • @Z.H.Trading
      @Z.H.Trading Месяц назад +2

      @@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

  • @user-rl5yy6qi8h
    @user-rl5yy6qi8h Месяц назад

    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

  • @r.c.3744
    @r.c.3744 Месяц назад +1

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

  • @heshamabdelhamid2732
    @heshamabdelhamid2732 Месяц назад

    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

  • @RealPhilTrades
    @RealPhilTrades 19 дней назад

    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.

  • @Fact_Check77
    @Fact_Check77 Месяц назад +1

    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.

  • @rayb1651
    @rayb1651 Месяц назад +1

    You cannot make contributions to an IRA with unearned income.

  • @Michael2Midnight
    @Michael2Midnight Месяц назад

    Can you itemize all your losses and write off losses?

  • @meditation7030
    @meditation7030 11 дней назад

    401K is not tax free, you pay taxes later, when you got retired. You will be paying taxes and getting less money as retiree. You should take it into consideration you may need more money as retiree

  • @robertgordon4757
    @robertgordon4757 Месяц назад +1

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

  • @katomane6116
    @katomane6116 Месяц назад

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

  • @wma79351
    @wma79351 Месяц назад +2

    That's why we need flat tax!!!

  • @atse1910
    @atse1910 19 дней назад

    Ross leaves out the fact you have to get a virtual address/virtual office for your LLC when trading in these types of broker accounts. The cost outwegihs any benefits if your trading income is less than $100,000. It sounds too good to be true.

  • @freeoldut2502
    @freeoldut2502 Месяц назад +1

    What about prop firms (Apex, Topstep, etc)?

    • @MikeStephanus
      @MikeStephanus 23 дня назад

      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".

  • @galactic25
    @galactic25 Месяц назад +1

    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?

  • @sumitomoO0O
    @sumitomoO0O 7 дней назад

    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.

  • @nitroice7108
    @nitroice7108 Месяц назад

    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.

  • @victorestevez7809
    @victorestevez7809 Месяц назад +1

    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
      @DaytradeWarrior  Месяц назад +2

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

  • @nicolepapageorge9727
    @nicolepapageorge9727 16 дней назад

    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?

  • @skynet000001
    @skynet000001 Месяц назад

    all im hearing is deferred taxes... example solo 401k and you still pay the taxes when you take it out.

    • @DaytradeWarrior
      @DaytradeWarrior  Месяц назад +1

      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.

  • @Alex-Music639
    @Alex-Music639 16 дней назад

    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)

  • @d.keithshores4500
    @d.keithshores4500 Месяц назад

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