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Taxes on Forex Trading for US Traders

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  • Taxes on Forex Trading for US Traders

    My question is how do you claim taxes on forex profits? Specifically for a US trader with an offshore broker like LMFX. Do we file taxes just like capital gains? Are there any tips to file a certain way to get a better rate? I figured Jason might have insight to share and any other US traders that have filed before I'm curious.

    2017 has been my first consistently profitable trading year and obviously hoping for it to continue and get more gains. But I want to make sure I have a certain amount set aside for taxes, and am just curious of what to expect even though it's a long ways off. In my wildest dreams of making a full time income off forex trading, how would I go about filing taxes for profits?

    Insights appreciated, thank you in advance!

  • #2
    Hi there.....this is a touchy subject as I am not a CPA nor do I claim to understand tax codes here in the USA. My advice is to bring your full year statement to your tax preparer. They will decide how to calculate things for you. I do know that you can have losses that carry forward like any business so if you lose for a year or two, then profit, you may be able to avoid all the taxes on the new profits based on prior losses. That is as far as I will go. Get a good CPA and you will be fine. All the best!


    • #3
      What I don't understand, too, is not profitable in a year. If so, do I still have to pay taxes?


      • #4
        If you are a foreign exchange (forex) trader, it is important for you to know how to pay taxes and calculations that apply in your country.


        • #5
          It seems to me that if Forex is going to be taxed, it should be only if the trader operates with large amounts of money and does it on a professional level. Because it's just stupid and unfair to take a part of profit from traders who work with several hundreds or thousands.