Tax filing 2011: Accounting tips for day traders

When filing federal tax returns, day traders should take note of a number of deductions that may be available for certain business and personal activities.

For example, individuals who purchased a new fuel cell automobile can claim the alternative motor vehicle credit. Use of a car is deductible under some circumstances, though the rate depends on the purpose of the trip. Driving a car for business purposes allows a deduction of 51 cents per mile for the first half of 2011, and a half cent less for the second half of the year. If a vehicle was used to move or reach medical care then the driver may be able to deduct 19 cents per mile for the first half of the year and 23.5 cents for each mile driven during the remainder.

Those who wish to take the self-employed health insurance deduction should note that it is now on line 29 of Form 1040, not on Schedule SE as in the past. Health savings accounts and Archer MSAs are also treated differently under 2011 tax rules, with a 20 percent tax on distributions not used for qualified medical expenses, which now include only prescription drugs and insulin.

Aside from changes to various tax breaks, day traders should be aware that the mailing locations for some paper returns has changed and check their area's to ensure they send their documents to the proper location. With the number of tax code changes that have occurred in recent years, it may be best to have a professional firm prepare returns.