Finally, a tax firm that actually understands how trading is taxed
Most CPAs have never heard of a funded account payout, the Section 1256 60/40 rule, or a Section 475 mark-to-market election. We handle these every day. If you trade futures, forex, crypto, stocks, or prop firm accounts, you're in the right place.
- Trader Tax Specialists
- Section 475 MTM
- Prop Firm Accounts
- Prop Firm Accounts
- Futures and Section 1256
- Forex Elections
- Crypto Reporting
- Trader Tax Status
- Section 475 MTM
What makes trader taxes different
Trading income is not investment income. The IRS treats them differently, the forms are different, and the rules for deductions are different. Most tax software and most generalist CPAs don't know the difference. Here's what you actually need to know.
Prop Firm and Funded Accounts
When you trade a funded account through a prop firm, you don't own the underlying securities. Your payouts are contractor income, not capital gains. They come on a 1099-NEC and get reported on Schedule C as ordinary income, which means they're also subject to self-employment tax. The good news is that your challenge fees, software subscriptions, and data feeds are deductible business expenses.
Learn MoreFutures. Section 1256
Futures contracts get automatic 60/40 tax treatment under Section 1256. That means 60 percent of your gain or loss is treated as long-term capital gains regardless of how long you held the position, and 40 percent is short-term. This is more favorable than standard short-term rates and it applies automatically. We file Form 6781 to make sure you get it.
Learn MoreForex. Section 988 vs Section 1256
Forex trading defaults to Section 988, which means your gains are taxed as ordinary income. But if you qualify and make the election before you start trading, you can opt into Section 1256 instead and get the 60/40 split. The election has to be documented before the trades happen. We help you figure out which treatment applies to your situation and handle the paperwork.
Learn MoreCrypto
Every time you sell, swap, or spend cryptocurrency it's a taxable event. That includes swapping one crypto for another, not just cashing out to dollars. Staking rewards, mining income, and airdrops each have their own tax treatment. Wash sale rules don't apply to crypto under current law, but everything else does. We handle the full reconciliation across all your wallets and exchanges.
Learn MoreStocks and Options. Trader Tax Status
If you trade stocks and options with enough frequency and volume, you may qualify for Trader Tax Status with the IRS. That lets you deduct trading expenses on Schedule C. Beyond that, if you make a Section 475 mark-to-market election, your trading gains and losses move from Schedule D to Form 4797 as ordinary income and loss, which removes the $3,000 capital loss cap and eliminates wash sale rules entirely. These elections have hard deadlines. We evaluate whether you qualify and handle the filing.
Learn MoreTrading Through an LLC or S-Corp
Putting your trading inside an entity doesn't change how the trades are taxed, but it can change how you pay yourself, what expenses you can deduct, and how your retirement contributions work. Whether an entity makes sense depends on your trading volume, income level, and long-term goals. We walk you through the math before you make a decision.
Learn MoreWhat we file for traders
Forms we handle
- Form 1040 with Schedule D
- Form 8949 (trade-by-trade reporting)
- Form 6781 (Section 1256 contracts)
- Form 4797 (Section 475 MTM ordinary gains and losses)
- Schedule C (trader business expenses and prop firm income)
- Schedule SE (self-employment tax on funded account income)
- Form 3115 (first-year accounting method change)
- Multi-state returns
Situations we cover
- Active day traders with hundreds or thousands of trades
- Prop firm and funded account traders
- Multi-broker reconciliation
- Traders with wash sale adjustments across accounts
- Crypto traders with multi-exchange activity
- Traders making or evaluating the Section 475 MTM election
- Traders operating through an LLC or S-Corp
- Cross-border traders (US and Canada)
Trader-specific add-ons
Section 475 Election Setup
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If you want to make the mark-to-market election, the paperwork has to be filed before the IRS deadline. We handle the structural review, draft the election statement, and manage the certified mailing. Miss the deadline and you wait another year.
Form 3115. Accounting Method Change
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Required in your first year switching to Section 475 MTM. This is a mandatory attachment to your return that documents the change in accounting method. It is not optional and most CPAs don't know how to prepare it.
High-Volume Trade Log
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If you had more than 2,000 individual trade lines across all your accounts, we apply a surcharge to cover the additional data work required to clean, reconcile, and process the full transaction log. We'll tell you upfront if this applies to your situation.
Common trader tax questions
Your trading income deserves a tax team that knows what it's looking at
Create your account and complete your intake form. We'll match you with the right services for your situation.