In examining presidential candidate Mitt Romney's tax returns, The New York Times reports, a close analysis indicates that he actually overpaid by about $44,000.
Many may have failed to realize this, the source notes, but it appears that Romney's returns overstated his capital gains so that he and his wife were assessed extra taxes. The news source reports that this occurred because of an error by the trustee of one of the Romney trusts.
The source also points out that Romney and his wife saved $1 in taxes during 2010 due to a tax credit for employers who hire workers who meet certain criteria, such as people who have been on welfare for some time.
These details, the source notes, underscore the complexity of the nation's tax code. Another example found in the Romney tax returns is a grantor trust set up by Romney and his wife for their five children. Through some knowledgeable estate tax planning, they effectively give their children millions of dollars. While the two cannot use the profits from assets in the trust, the source notes, they pay taxes on the trust's gains themselves to give their children more.
Time magazine notes that the candidate's returns were nearly 550 pages long. While day traders may not have to cope with complexity on that scale, the services of a professional accounting firm may still be useful in coping with the many, ever-changing provisions of the U.S. tax code, particularly with many lawmakers proposing further changes.
Wednesday, February 1, 2012
Romney returns reveal tax code complexity
Tuesday, January 31, 2012
Capital gains tax going up, expert writes
Any significant federal fiscal reform plan is likely to include a higher capital gains tax rate, expert Ronald Barusch recently wrote in The Wall Street Journal.
Federal lawmakers with opposing views of the tax code are considering either higher taxes on high earners, who Barusch indicates benefit most from the fact that the capital gains tax rate is lower than the income tax rate, or a tax code with lower, flatter marginal rates.
In the former case, higher capital gains taxes may be the only way to increase federal tax revenue derived from individuals who get little of their income from salaries and wages, according to Barusch. In the latter, on the other hand, eliminating tax preferences for capital gains may be a necessity in order to balance lower marginal rates.
Day traders would feel the impact of such a change on their business, since capital gains are generally their primary income source. Barusch also estimates that many other investors are likely to rush deals in an effort to take advantage of the current tax rate before such an increase took effect, among other consequences.
According to opponents, a higher capital gains tax rate is detrimental to economic growth because it discourages the investment that fuels entrepreneurship and business expansion. If a slowdown does occur, day traders may find the pace of activity slows, possibly discouraging investment by making it less profitable. They may wish to support alternative measures to raise federal revenues.
Sunday, June 8, 2008
Oil's Historic Day Sends Dow Spiraling Downward
The previous all-time record close of $133.17 was set on May 21 while the largest one-time gain was set on Thursday when oil surged $5.49.
Crude’s surge was so sharp that trading was temporarily halted Friday afternoon for all oil-related commodities after they hit their daily limit for trading on the New York Mercantile Exchange.
Crude oil peaked at $139.01 a barrel on Friday afternoon, an increase of $11.22 after opening the day at $127.79.
The price jump came as traders buzzed about an analyst predicting oil would hit $150 by next month, a drop in the U.S dollar and a threat of a potential air strike in Iran.
Ole Slorer, a Morgan Stanley analyst, forecasted crude could hit $150 by July 4, due to increasing demand in Asia. This combined with a weakening dollar may have encouraged overseas traders to seek a hedge against the falling dollar.
A day after the European Central Bank made comments that hurt the greenback, the dollar fell further on Friday as a result of weak labor data. The U.S. Department of Labor released a report showing the unemployment rate increased from 5.0% to 5.5% last month, the biggest monthly increase since 1986.
Phil Flynn, FOX Business contributor and energy analyst at Alaron Trading cited the data, the dollar, and geopolitical concerns.
“You put it all together it was a prefect storm to drive these prices,” Flynn said. “Traders down here never saw anything like it and they may never see anything like that again.”
Nigeria's Oil Minister Odein Ajumogobia told Reuters that OPEC is ready to jump in and help to slow rapidly rising oil prices, but it does not see any reason to immediately increase supply. Ajumogobia insists the weak dollar and fear of a supply gap were the driver in today’s spike, according to Reuters
Friday, May 23, 2008
It's Not Just Taxes, It's the Dollar
If it's agreed that stock market returns at the very least indicate long-term economic optimism, the dollar's fall should be issue no. 1 for candidates on both sides. Just as high tax rates erode the value of paychecks and investments, so does inflation. And when stock market returns over the last 60 years are considered, it becomes apparent that all three presidential candidates do not have their eyes on the ball. In short, it's the dollar, stupid.
Today's Republicans want tax cuts, while Democrats want tax increases. Judging by equity returns, both sides ignore the dollar at their peril.
Friday, March 7, 2008
Useful day trading website
Friday, February 29, 2008
There are, however, some strategies that active investors can use to reduce their tax bills — and make life much more pleasant come tax season. Here's what you need to know about them.
Trader vs. Investor
So what are you, you ask, a trader or an investor? This is one of the fuzziest areas of our fuzzy tax code. "The question is clear; the answer is not," says an IRS spokesman. The only way to define your status is to go by the guidelines laid out in several court cases that have addressed the question.
The courts say you are a trader if:
· You spend lots of time trading. Preferably, you don't have a regular full-time job. (My reading is, you can also be a part-time trader, but you had better be buying and selling a handful of stocks just about every day.)
· You have established a regular and continuous pattern of making lots of trades (several almost every day the markets are open).
· Your goal is to profit from short-term market swings rather than from long-term gains or dividend income.
If you think you qualify and want to know the nitty-gritty of the rules, see More Tax Tips for Day Traders. If you're not so sure, here's how I think these court cases apply to the real world. Say you spend 10 hours a week trading and total about 200 sales a year, all within a few days of your purchase. In my book, you're an investor, not a trader. You are not spending enough time or trading often enough to satisfy the IRS. How about 20 hours a week and 1,000 short-term trades? I think that amount of time and trading gets you there. If you spend 30 hours a week, make 5,000 short-term trades a year and don't have a full-time job, even the IRS should agree without a fight. If you choose, you can actually be both a trader and an investor. You must segregate your long-term holdings by identifying them as such in your records on the day you buy in. Then they won't "taint" your trader status.
Thursday, January 10, 2008
Ordinary Income and Capital Gains
According to an article on ordinary income and capital gains taxes, profit you make from your stock investments can be taxed in one of two ways, depending on the type of profit:
• Dividends - When you receive dividends from your stock (either in cash or stock), these dividends get taxed as ordinary income. This is also true if those dividends are in a dividend reinvestment plan. If, however, those dividends occur in a tax-sheltered plan, such as an IRA or 401(k) plan, then they’re exempt from taxes for as long as they’re in the plan. In January, investors receive a 1099-DIV statement from the issuer of the dividends that includes information on the amount of dividends earned the previous year. Check with your tax advisor because the latest tax laws offer tax advantages for dividends.
• Short-term capital gains - If you sell stock for a gain and you’ve owned the stock for just one year or less, the gain is considered ordinary income. If you buy a stock on August 1 and sell it on July 31 of the following year, that’s less than one year. To calculate the time, you use the trade date (or date of execution). This date is the date that you executed the order instead of the settlement date. However, if these gains occur in a tax-sheltered plan, such as a 401(k) or an IRA, no tax is triggered.
Long-term capital gains
Long-term capital gains are usually much better for you as far as taxes are concerned. The tax laws reward patient investors. After you have held the stock for at least a year and a day (what a difference a day makes!), your tax rate will be reduced. Get more information on capital gains in IRS Publication 550 “Investment Income and Expenses”. Because the tax on capital gains is the most relevant tax for stock investors.
Managing the tax burden from your investment profits is something that you can control. Gains are taxable only if a sale actually takes place. (In other words, only if the gain is “realized.”) If your stock in GazillionBucks, Inc., goes from $5 per share to $87, that $82 appreciation isn’t subject to taxation unless you actually sell the stock. Until you sell, that gain is “unrealized.” Time your stock sales carefully hold on to them at least a year to minimize the amount of taxes you have to pay on them.
Tuesday, October 2, 2007
Day Trading Services and Day Trading Software
Traders Accounting – Providing Day Trading Services and Day Traders Accounting Software
