[TinGull]

Hi there,

Just curious as to those of you in the US who trade futures ONLY do your taxes by yourself or have someone else do them? And...how much does it usually cost to have someone do them for you? I've only been trading as a business since September and have maybe 60 trades to account for under that. Is it worth having someone else do it so it doesnt get messed up?

Thanks all!

Chris

[MrPaul]

I would shop around and compare accountant rates. For 06' your prolly just fine, but in 2007 you may want someone who can maximize your deductions etc.

[TinGull]

Cool. I figure I prolly won't get audited for 3 months worth of trading...

You recommend doing a hometown accountant? Or something like a big box H&R Block or something?

[MrPaul]

Originally Posted by TinGull »

Cool. I figure I prolly won't get audited for 3 months worth of trading...

You recommend doing a hometown accountant? Or something like a big box H&R Block or something?

I use a local guy, he's not a powerhouse or anything but he's smart and really good at what he does. I used turbotax and him to compare he maximized my deductions and got me 2.5x what turbo tax estimated.

[TinGull]

Nice. Did you find him by looking for someone that specialized in trader taxes?

[rock]

My experiences with H&R are not good. High standard fees for a mediocre return. My dad used to handle a lot of tax returns for various organizations and he had to leave a local cpa due to performance issues. I did some fishing and found a great local cpa who dishes out advice. I've never meet an accountant who could offer any advice at a place like H&R.

I guess like most things you have to spot out the quality accountant to suit your needs whether its at an H&R Block or whatever.

It's a blended US tax rate of 23% regardless of amount earned, plus state taxes, for futures traders.

Another reason to consider moving to Florida when you get really good at it (no state taxes).

More info: CBOT - Taxes for Active Futures Traders

It's a recent 2007 seminar on Taxes for Futures Traders, by tax accountant Robert Green.

Slides are here: http://www.cbot.com/cbot/docs/80257.pdf

And for those who don't want to register for the event, to view it try this link here:

http://mediasrv1.cbot.com/02062007_green

Or follow the instructions at this link here if that doesn't work out for you:

http://www.traderslaboratory.com/for...html#post10827

-cooter

[brownsfan019]

tin - I would not touch your H&R Block, Jackson Hewitt's, etc. out there. They are not going to know a thing about futures taxes. Odds are you know more than they do.

My opinion is that if you want the best tax treatment, you need to find the best. If you want local, get on google and see what's near you. For me, there are some major tax firms that are 'local' so I started there - Ernst and Young, etc. - firms like that.

If you can find a local guy that knows what he's doing, great!! Just keep in mind that very few 'jack of all trades' cpa's out there deal with direct futures trades. It's just not common at all. I would put together a list of interview questions so you can screen some guys out. The most basic question - what is your understanding of how futures day trading is taxed? In other words Mr. CPA, if I hold a futures trade for 5 minutes and make money, how am I taxed?

... very basic question that anyone with a tad of knowledge about futures should be able to ask, but if they can't answer that, time to go. You'd be surprised how many assume that futures are just like stocks and therefore, you'd be taxed at all short-term gains on that trade. That is a VERY costly mistake obviously.

There's also some firms that are specifically built around traders, but probably not local to you. I would check them out as well. I've read good things about http://www.greencompany.com/ I cannot speak on their behalf, so do your own due diligence.

Taxes are a MAJOR consideration when running a profitable futures trading business. How your taxes are prepared can literally increase/decrease your final year-end P&L by thousands of dollars.