Funded Trader Taxes | Traders Tax Pro (2024)

Funded Traders: Trading large sums of other people's money

More & more traders are reaping the benefit of being able to trade with large accounts without ever touching their own money. Funded traders (a.k.a proprietary traders) must still report their trading activity. However, funded trader taxes are much different than taxes on your own personal trading accounts.

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FUNDED TRADING TAXES: HOW FUNDED TRADING IS REPORTED ON YOUR TAX RETURN

When you become a funded trader and you start trading with somebody else’s money, you are considered an independent contractor. This means, you will be earning self-employed income. Technically, you are conducting business as a Sole Proprietor if you have not yet set up a business entity. I always recommend that funded traders form a business entity for their funded trading activity, even though it is not required. As an independent contractor and sole proprietor , you will:

  • File a schedule C with your form 1040
  • Be required to pay self-employment taxes
  • NOT report your earnings from a funded account as trading gains or losses but rather, earned income

WHY YOU NEED A FUNDED TRADER TAX PRO

For many funded traders, they have never owned their own business before. A taxpayers tax return becomes a bit more complex once you are considered self-employed. Typically, funded traders also have personal accounts that they trade and invest with alongside their funded account. As a funded trader, adding personal market activity to the mix will naturally result in a more in-depth and complex tax return. This means you will have many different parts to your tax return.

  • The trading gains and losses are not accounted for on your tax return. (this only pertains to your funded account activity)
  • Only the amounts of money you are paid by the funding organization will reflect on your tax return (as well as amounts you chose to retain in your funded account). Furthermore, these amounts will be classified as earned income.
  • The IRS does not care if honest mistakes are made. Lack of understanding is not considered an excuse!

Funded Trader Taxes | Traders Tax Pro (1)

Learn Everything About Funded Trading

Want to know what funded trading is, how it works, how it is taxed, & who I consider to be the best funding prop firm out there?(There may even be an exclusive discount code to use with them Funded Trader Taxes | Traders Tax Pro (2))

TRADERS TAX PRO

We make it easy to prepare & File Your Tax Returns

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At Traders Tax Pro, we make it simple for funded prop traders to file their returns. Be sure to have your invoices & payments receipts in order.

If you are a sole proprietor or, you’ve created a single member LLC, we will be filing a Schedule C with your tax return. If you’ve created any other business entity, we will have different procedures to follow.

Please also have your well-documented expenses in order as you will be able to deduct any ordinary & necessary expenses incurred as a funded trader.

On our introductory call, we will go over whether or no you have properly made your estimated tax payments throughout the year. If you haven’t, I will teach you what needs to be done for future reference.

Questions? Contact us

follow these 4 simple steps:

  • Schedule Your Introduction Meeting

    This will be a quick video call where we are able to meet one another. I will show you our Client Portal & how to get started with Traders Tax Pro. We will also schedule your final meeting based on your availability.

  • Create An Account

    After our introduction call, you will be able to create an account in order to utilize Trader Tax Pro's secure and easy-to-use Client Portal. The Client Portal may be accessed & used via your computer or mobile browser, or even the mobile app! Once your account is created, you will receive an email notification to log in and complete your "organizer". Simply answer a few questions and upload the documents requested.

  • Preparation Of Your Tax Return

    You don't have to do anything! With the information you've provided in your Client Portal, I will work on your tax return, ensuring you the best possible outcome. This is where we minimize your taxes and maximize your profits!

  • Final Meeting

    This will be a quick video call where I will briefly go over your completed tax return with you. During or after this meeting, you will sign in to your Client Portal where you will receive an invoice for your tax return preparation. Once you pay, you will be prompted to e-sign your tax return documents which will enable us to e-File your return! On this call, I can even show you how our Client Portal makes it easy to store your documents, allowing you to download or print them as you need.

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Funded Traders tax returns filed with accuracy

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Funded Trader Taxes | Traders Tax Pro (2024)
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