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Traders & Self Employment tax

From: David S. Zicko, CPA <dzicko@pacbell.net>
To: eminiaddict@gmail.com
Received: Monday, February 02, 2009 08:02 PM
David,
Listening today, I still get the impression that you think individual traders profits are subject to Self Employment tax. This is not the case.  Attached are a couple of references for you.
 
An active trader is entitled to deduct their expenses whether they are an individual, LLC or S-Corp, and are not subject to Self Employment tax on the gains.  While LLC's and S-Corps are great for legal liability protection, there is truly very little advantage for an individual day trader that is trading for their own account.
 
Just my opinion, and would rather your listeners not get the wrong impression.
 
Thanks for the trading room service!
 
dzicko@sbcglobal.net   
dsz,  (cpa)