21 Tax Write-Offs for Traders
NAICS business codeYour NAICS business code is a six-digit string of numbers that shows the type of work your business does. NAICS stands for North American Industry Classification System. When you do your taxes, you'll enter it in Box B of your Schedule C.523110
Reviewed bya tax professionalThis content has been reviewed by an Enrolled Agent (EA) with the IRS — the highest credential awarded by the agency. Enrolled Agents are empowered to represent all taxpayers before the IRS, on all types of tax-related matters. Accountants who earn this certification have passed a comprehensive three-part exam on individual and business tax returns. To maintain EA status, they must stay up to date in the field by completing 72 hours of continuing education every three years. Traders are used to seeking out the best ways to build their portfolios. But that same financial savvy can be used to save money off your tax bill.
If you trade stocks for a living, you’re entitled to write off business-related expenses, lowering your overall tax bill and leaving more money to invest in your future. Whether it’s trade journal subscriptions or financial consulting services, these ordinary expenses can be put to work for you. No trade-offs required!
Fees for professional financial advice are tax-deductible.
Deduct anything you buy for your office, like pens, binders, folders, printer ink, or a whiteboard.
Any subscriptions to trade journals related to your industry are considered tax write-offs.
Write off books, publications, databases, and other reference materials you buy or subscribe to.
If you pay an accountant to track your trading, income, and expenses, you can deduct their fee.
If you drive for work ...
As a day trader, you benefit from being self-sufficient: scheduling meetings with a mentor you can learn from, or making office supply runs to ensure you have what you need to do your job well. If you drive for these or other work-related purposes, you can claim car expenses on your taxes.
Parking for a meeting downtown, or any other work trip, is tax-deductible!
A toll while driving to or from a work destination is tax-deductible!
If you buy a new car, you can write off part of the cost every year for five years.
Flashlights, tire iron, duct tape, and other tools you may need in your vehicle are deductible.
Car insurance monthly fees, registration, even roadside assistance are partially deductible.
Oil changes, repairs, and regular checkups are all tax-deductible if you drive for work.
If you discuss work at a restaurant ...
Going to a restaurant for a chat you're hoping will turn into a referral, or meeting with financial planners or fellow equity traders to chat about industry trends over dinner both count as work-related business expenses.
If you discuss work with a coworker, mentor, client, or prospective client, it's a write-off!
If you leave town for work ...
Another write-off that belongs on your Schedule C? Work-related travel expenses. For example, you may need to travel out of town for an equities trading conference.
Planes, trains, and car rentals are all work-related travel costs that can be written off.
When you travel for work, lodging expenses such as hotel rooms or Airbnb are write-offs.
When you're traveling for work, all meals are tax-deductible. Even takeout!
If you work from home ...
The stock market doesn't sleep! Whether you work from home full-time or just stay home to conduct industry research and manage paperwork once in a while, you can deduct a portion of your home office expenses.
A desk, chairs, lamps, and other home office necessities are all tax write-offs.
You can write off up to $2,500 for individual repairs to your property.
Gotta keep the lights on in your home office! A portion of your electricity bill counts.
Whether it's rental or homeowners insurance, you can write off a portion through your home office deduction.
It'd be hard to work in an office without running water, huh? Your water bill counts.
Your Comcast bill is a tax write-off. You need internet to do your job!
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By Chloe Bryan
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