Business Strategies

Is Trader Tax Status Worth It?

As we navigate a world with COVID-19, large swings in the stock market have become the norm. Many buy and hold-style investors are more actively managing their portfolios to take advantage of these swings. The IRS has a special trader status for taxpayers who frequently engage in trading. This status includes a special accounting method, not available to the average investor, that can come with substantial tax savings. The status allows an investor to make special deductions and opens the door to a wide range of tax reduction strategies unavailable to the casual investor. However, with potential savings also come risks that could end up costing the taxpayer/trader more than the average investor. Weighing the pros and cons of this status is crucial in minimizing tax liability. The big question for tax planning is this — does obtaining trader tax status result in less tax?

Subscribe to Read the rest of the article

Think Outside the Tax Box provides tax reduction strategies along with practical implementation advice in order to reduce your clients’ federal tax bill with ease.

Already have an account? Sign in

CURRENT EDITION

2025 Winter Education Series Event Calendar

Dominique Molina, CPA MST CTS

Think Outside the Tax Box proudly presents the 2025 Winter Education Series! This October through December, we are bringing our loyal subscribers five webinars featuring some of the brightest minds in tax. Each high quality webinar is filled with engaging content, actionable insights for your clients, and they all come with continuing education credits for those who qualify. All of this is included in your regular subscription! Check out what we’ve got in store for you!

Is It Time to Hire in Your Firm?

Timalyn Bowens, EA

After my second busy season as a solo practitioner, I made a terrible mistake within my firm. I hired my first employee. As a matter of fact, I hired someone who also had tax and accounting experience. You may be thinking, “What? Hiring is the solution if you were feeling overwhelmed.” That is true, if you are assuming that I had the proper systems in place. The mistake I made was hiring an employee before I was ready. The money was there and ready. The work was there and ready. It only took a few weeks to realize that I didn’t have a capacity issue. I had a systems and processes issue. I am not suggesting that you should work yourself to full capacity, absolutely not. I am suggesting that before you attempt to pass along a task to someone else or put in place automation that you have a written-out process.

You Don’t Need a Bigger Stack — You Need a Better Portfolio

Joshua Youngblood, EA, CTRS, CRETS, NTPI Fellow

In every tax Facebook group or conference session, there’s always that one pro excitedly talking about the latest app they’ve added to their “tech stack.” But here’s the dirty little secret: most of us aren’t running integrated tech stacks. We’re juggling a mix of disconnected tools that may or may not play nicely together. Let’s stop pretending we’re all building perfectly integrated ecosystems. What we really need is a tech portfolio—a curated collection of tools that serve our actual needs, reflect how we really work, and support the kind of client experience we want to deliver. A portfolio recognizes reality: tools don’t have to talk to each other perfectly. They just need to work for you. So let’s explore how to build a smart, efficient, and secure tech portfolio that helps you thrive whether you’re a solo professional or managing a growing team.