Hey people,

I knew that managing finances would be a key part of trading as my job and initially I thought I could handle it all on my own, but I’m realizing that my trading income isn’t as straightforward as a regular paycheck. There are short-term and long-term capital gains to consider, plus various deductions I might be eligible for.

I’ve been keeping detailed records of all my trades and costs etc etc etc, but it’s starting to feel like it’s taking up a lot of my time.

I’m considering hiring a professional accountant who specializes in trading if they exist, but I’m also curious about how others handle taxes and accounting. Do you manage it yourself or use a professional?

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[Christian HarrisParticipant]

Income tax is generally complicated regardless of your jurisdiction, and you should always stay informed about relevant tax laws and regulations.

Without getting too detailed, the tax you typically pay depends on whether you work a ‘regular’ full-time job and trade on the side or trade full-time as your primary source of income.

The difference usually comes down to whether you pay capital gains tax (on longer-term investments) or income tax (on short-term trading).

It’s always worth consulting a tax professional familiar with trading and investing in the country you trade to ensure accurate reporting and to take advantage of potential deductions.

You want to avoid an unforeseen tax bill years down the line.

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[Dylan S]

I have an accountant that manages the actual submission and a lot of the calculations but I log everything throughout the year.

What a professional is best for, in my experience, is advising on legal ways to minimise your tax bill, one being the deductions that you mentioned, but also other things the everyday person may not be aware of.

I would add that my accountant isn’t a specialist in trading or anything but I’m not sure they really need to be?

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[James BarraModerator DayTrading.com Team]

Hi DT38,

Thanks for your message.

Christian has provided a great overview of the key considerations you’ll need to consider from a tax perspective. I’d also recommend reading our guide to trading taxes. And if you scroll to the bottom you will find pages on trading taxes in various countries.

It’s definitely worth speaking to a professional tax advisor if you’re unsure about your obligations.

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[TradeTheDay]

Used an accountant for year one and then sacked them off and did it myself. They’re useful to get you set up doing the right things then you can probably manage it on your own.

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[DT38]

Hey,

It sounds like it’s pretty unanimous that it’s worth getting a professional accountant to help, at the very least to start with!

Thanks all.

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[Christian HarrisParticipant]

It’s definitely worth speaking to an accountant, but I recommend choosing one with experience preparing accounts for traders and investors. Regular accountants might not have experience.

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