What record keeping system do you use?
Your trading account statement...
First, is trading your only job? And second, are you profitable?
The rest is just fluff.
Uh-
Read the posts here and you won't even need a starting point.
You can read my thread if you have thick skin, it'll get you started.
I have started this thread to help me and others in my position to keep our affairs in order.
I have been advised by my accountant to keep a trading journal to justify my tax position as a trader. Well, I kind of have done something, with loose sheets of paper, several communal notebooks, a couple of spreadsheets, a half-attempt at a blog, but no real system in place. In short, it's a mess.
Before I put a system in place, I would like to see what others do that works for them? How do you track the work you do evaluating/managing your EAs, your trading notes, strategies and learnings? Please help!Trading account statement
Yes I'm profitable and I have a tax problem. I work for myself in a number of capacities, trading is one of them. The tax laws in my country do not recognise the number of trades you make as qualification as a trader. To qualify as a trader you have to demonstrate that it is your JOB otherwise it is a hobby. Therefore evidence of testing, trading notes, lessons learned, etc is also important. Keeping them altogether is the hard part so that a dumb auditor can see that it is a proper job, not something done on the side. Right now I struggle with that. Does anybody else have the same issues or are your employment records as unsubstantiatable as mine currently are?
hi
did u trade with local broker ? As I knew if you deal with online broker there's no relation with a government , you can trade anywhere and deposit or withdrawal as you wish
===================
Hope this helps to give you some general idea but depending on where you are as different countries have different rules on tax laws.
Thanks for your replies but I don't need help interpreting the tax laws of my country and that is not my question. I pay an accountant for that advice. I wish a tax status of trader which means I can claim all my expenses, not just pay tax on my income.
My question relates to the system that others use to keep a track of all your expenses, testing, coding of EAs, for example do you keep it all in a spreadsheet or use a diary or whatever? What works for you? I am sloppy in my record keeping and would welcome some ideas of how others keep the huge volume of data created each day in a logical and professional condition. To be a professional in this business a full trading journal should be kept but what does that mean when it actually comes down to it. How on earth do you stay on top of the volume in forex?
Keeping a diary when testing and not actual trading does not constitute trading in the eyes of the tax authority. If you need to justify your position as a trader then your trader tax accountant [do not use a regular accountant] should be able to provide you the requirements to substantiate it. If he cannot give you that information whether your expenses qualify as expenses then I suggest you find a new accountant.
Yes, expenses are deductible provided you have already met the qualifications as a trader in the eyes of the tax authority, and you are profitable.
Yes I'm profitable and I have a tax problem. I work for myself in a number of capacities, trading is one of them. The tax laws in my country do not recognise the number of trades you make as qualification as a trader. To qualify as a trader you have to demonstrate that it is your JOB otherwise it is a hobby. Therefore evidence of testing, trading notes, lessons learned, etc is also important. Keeping them altogether is the hard part so that a dumb auditor can see that it is a proper job, not something done on the side. Right now I struggle with that. Does anybody else have the same issues or are your employment records as unsubstantiatable as mine currently are?
Well, I think the auditor will look at how much time is spent trading on a daily basis, the amount of money made, and they'll see how many % of your trading profit is your total income. They are not stupid. Just keep a daily journal, and reflect on the trades on a daily basis.
I assume he's not located in the United States. Here, if you want to seperate any kind of business from your personal effects, you form a L.L.C (limited liability corporation) with at least two people. Once you've filed for this, you can claim all sorts of things as belonging to the LLC, and not yourself. This includes expenses from working in an office at home, if that is the case. Also, an LLC is not required to turn a profit, in fact many do not when they are starting up. I agree with the above posts that your tax pro should be able to tell you what you need to do.
As far as keeping a trading journal, you should do that no matter what. I just keep mine in a notebook for now. Don't make it so complicated that you don't want to fill it out every day / week. Make it a usable, live document.
- Free trading apps
- Over 8,000 signals for copying
- Economic news for exploring financial markets
You agree to website policy and terms of use
I have started this thread to help me and others in my position to keep our affairs in order.
I have been advised by my accountant to keep a trading journal to justify my tax position as a trader. Well, I kind of have done something, with loose sheets of paper, several communal notebooks, a couple of spreadsheets, a half-attempt at a blog, but no real system in place. In short, it's a mess.
Before I put a system in place, I would like to see what others do that works for them? How do you track the work you do evaluating/managing your EAs, your trading notes, strategies and learnings? Please help!