There’s No Good in Procrastination
Investing online seems to pique many individuals. This is why every investor should be equipped with online investing wisdom to attain that elusive edge in the industry. To tell you, it is pretty hard to procrastinate. Same is true in regard paying taxes due your investments.
Taxes are the lifeblood of the government. And you wouldn’t want to paralyze its functions by coming up with erroneous returns. So how do you avoid tax payers’ mortal sin – procrastination?
First, you have to know the basics. You may ask: If I am using funds in an IRA for all of my trading, can I be considered a trader? As far as the Internal Revenue Service is concerned, saving for your own retirement is not a business.
If you claim trader status, you are jeopardizing the tax-deferred status of your retirement account simply because you are saying that it is your business. It is settled that there are no court decisions in this area, but this is the current belief at the IRS.
The root cause of your dilemma is that your income is not taxed as it is earned in your retirement account. It is taxed as it is taken out. So the IRS will get its part, but not as a direct result of your trading venture.
As for your trading costs, you can ask your broker to charge the miscellaneous fees directly to your IRA account so that you do not have to withdraw money to pay them. If your broker refuses, you can always write off those expenses as itemized deductions on your tax return.
To all the procrastinators out there, struggle away from procrastination.
