Clubhouse who had the pleasure to meet um a couple times in person where I came down there to Tampa uh so she deals with a lot of people in the financial space uh who are Traders um and she helps them get their entity set up and really can help you keep on a straight and narrow when it comes time for tax time so any tax question that you have uh she's more than than capable to answer and um she defin has Services as well that you take um that she can actually help and assist you with so I want you guys to give her a big round of applause and we appreciate her taking her time out of her day to come in here tonight uh to be able to answer questions and provide info on what are the next steps so we appreciate you thank you hello hello good evening good evening everyone good evening Lawrence thank you so much um for the opportunity um to teach that's one of the things I love to do is um is teach people um I don't teach you how to trade because then you're going to lose your money but I can teach you on how once you start making this money one how to move it and um two how to not give iOS all of it um yeah Lawrence and I I think like the end of 2019 the beginning of 2020 we met a clubhouse um and um we've been um in communication since then and um and hopefully he's being an asset for you guys which I know know that he is um Lawrence is a hard worker um TR one thing I can tell you about Lawrence is that he he's one he's not going to give up two he's he's going to show up so um if you if you follow his way you are definitely going to not just learn but grow in the um in the industry um so let we'll get started one thing that I do ask let's see um you do not have to wait until um oh I look crazy in here let me get this video off um you do not have to wait until I'm done um I would like this um class to be very proactive so you don't have to wait till I'm done my presentation for you to ask questions in the midst please um you guys can get off mute um and ask any questions that you guys have because I I do understand that there are sometimes where you have a question and by the time the person finished talk you forget what you are going to say so I don't have a problem with us being proactive and um and I'm here to answer these questions for you guys so we'll get started let me pull this up let's put this in presentation mod I don't care about the watermark okay so just um today we're going to actually go over trading under a business the right way um just to tell you guys a little bit about about myself um I'm Abby Joseph um I'm originally from the island of Haiti um we're beating this storm here in Florida with lots of flood so I'm used to hurricanes coming from an island I was raised in Sarasota um I currently live here now in um in Tampa Florida but looking out to move to Seattle so I'm excited about this this big move um what do I do I help business owners and Retail Traders maximize their tax savings and minimize their tax liability um so who you are and how iOS looks at you versus how you want them to look at you is very important in the the stock market industry because how you see yourself as a Trader and how iOS sees you is two different things all right so you may consider yourself a um a a day trader or swing Trader or um scalper right or even a long-term Trader but how iros sees you is is not is really simple iOS either sees you as a Trader or an investor they don't see you as um anything different so investors versus Trader iOS says that if the nature of your trading activity does not qualify as a business you're considered an investor and not a Trader so it doesn't matter whether you call yourself a Trader or a day trader you're considered an investor one of the publication and I love um going straight to i.gov one of the publication that I want you guys to get really familiarized with is publication 429 as a Trader in the stock market you want to really get comfortable with this publication uh when you have a chance read it because almost all the information that I am going to go over with you is coming from that publication um I spent I spent three years um just understanding the tax code and understanding that publication inside out that publication is a 350 page publication so I I reviewed it went inside out go over uh business attorneys about it just to make sure that publication um is what um I I need so um get really familiarized yourself with publication 429 so everything that I'm going to go over with you literally all I did was take it from IRS thg itself from the publication itself and all I did was um put it in terms for you to understand so if you see that quote that I just read to you it literally came straight from i.gov see iOS says if the nature of your trading activity doesn't qualify as a Trader for business you generally consider an investor and not a Trader it doesn't matter whether you call yourself a Trader or day trader I didn't say that I said it see you're an investor for federal income tax purposes so not in the stock market but for tax purposes you're an investor so it's very important to know the difference um and as an investor iOS sees you as an individual that buys and sells security and with the expectation of um um collecting incomes from dividends interest and capital appreciation so you buying and you uh you buy and sell these Securities and you hold them for your personal investment so you're not conducting a trade see you're not conducting a trade for a business you're literally an investor that's how iOS so as long as you're trading under your social security number iros sees you as an investor not a Trader okay um so if you see what iOS considerate Trader here the special rules is if you're a Trader in Securities in the business of buying and selling security for your own account the law considered this to be a trade or business even though a Trader doesn't maintain an inventory and doesn't have customers you can still be trading under an entity okay so let's get back to um our presentation I just wanted you to get really familiar get yourself familiar with on publication 429 you don't have to memorize it or you don't have to know it from A to Z but it's important for you to actually know the basic because what you will find is a lot of um a lot of um CPA or accountant they're not familiar with the stock market or then that's not familiar with Traders they'll tell you they don't know anything about it and it's okay because accounting is very broad guys it's kind of like you coming to an orthopedic and asking them question about um gastro you know so you want every um tra trade has their specific Niche so there's three Trader category that you want to know there is the individual self-directed investor there's trading as a business without 475 which is MTM election we'll go over that there's trading as a business with MTM election and we'll go over the differences all right as an individual self-directed investor you can't deduct business expenses you are subject to was rule limited to $3,000 per year in a net loss um deduction so as an individual that's trading under your social security number if you have a loss for the year you can ride off $3,000 per year um up to seven years so if I lost $20,000 this year in the stock market I can only write off $3,000 but up to seven years so every year I can write off another $3,000 000 some of you will ask okay Abby what if I lost 20,000 this year and then I lost another 20,000 next year it's just 7 3,000 up to seven years with seven years it started all over again 3,000 up to seven years okay um individual self-directed investor the way you are taxed is on capital gains longterm is anything that is held over a year you are capped at 20% cap a 20% meaning 20% is the highest tax um most that I find in IND idual investor um tax in I would say in capital gains is between 8 to 12% most of my investors don't really pay much on their capital gains between 8 to 12% my short term this is where I find a lot um I just did tax planning for a client and last year um he came to me in the last minute he came to me around December and he had a tax liability of $55,000 and then this year we did his tax planning he'll be looking at 20 so it's very important to have some type of plan just like you plan in the stock market you want to plan ahead ahead too when it comes to your taxes so for shortterm that is anything held under a year you cap at 37% that is the highest that you'll pay um my clients usually pay between 18 to 20% on short terms okay now there's two path to overcome the investor status path number one is qualify for TTS status TTS status stands for Trader tax status okay um now Mark to Market election it's TTS status and Mark to Market election path number two is trade under an LLC or an escort these are the only way that you can actually get rid of the trader um investor status now TTS with TTS allows you to do is it allows you to take a business deduction which you can qualify for at the end of the year now I want you to understand that TTS is not an entity TTS is an opportunity that IRS gives to Traders says okay since you are in the stock market for four hours or more a day you know um that includes your research you being in Yahoo finance you being in blueberg you doing your technical and your fundamental um since you are trading about three trades a day and your trades are daily weekly and the majority of your trades are under 30 days you don't need to create an entity I'm giving you an opportunity to take take business deduction so but at the end of the year you need to qualify you have to go through this qualification every year um in order for you to obtain TTS status now I do want you to know Mar Mark to Market election and TTS status are two different thing and we'll go over Mark to Market election so those are the qualification for you to qualify for TTS status how do we go all the way here okay um path two which we said was LLC or escort LLC is the most structure uh it's the most basic structure um it requires a business tax return it's a pass through entity all taxes are paid on the personal income tax level and all realiz gains or tax whether you take the money out or not um all realize gains or tax okay escore is also a pass through entity but it does require for you to put yourself on payable what I usually require is for my clients to start making around 50 50,000 or more a year in order for me to elect them as an escort and the reason why is because you need to be on payroll you need to be making enough money for um for you to pay yourself and now not only that under an escort um it's it's even though it's a pass through entity um you are completing two tax return and LLC you're completing one return with the escort you're completing the business return separately and then you take your K1 which is flow to your personal and then you create your personal but what I do love about the esor and even with the LLC you do have a pre- tax contribution like I have um a client who made $2 million last year right trading um he made $2 million last year trading so we needed to move this money because he was looking at a high tax liability he's 27 young he plays forx one of the thing that I do love my favorite to to be honest with you on the tax purposes is Forex Forex has better tax benefit than options or Futures and that's because with Forex Forex has um 40% of of the income you make in the stock market you are only taxed 15% and then the um the other um 20% um other 60% I'm sorry no I'm sorry 60% of the income you make in the stock market is taxed at 15% and the other 40% is taxed at ordinary so that other 40% what we had to find is ways to move that money so we were able to do a pre-tax contribution for him um he um so we did a SCP Ira he he preferred the solo 41k because he was also looking at um real estate when you're looking at real estate the solo 41k is a better um contribution than the SCP because with the solo 401K he could take he could borrow money from it and then reinvest it into real estate so also you can deduct health insurance premium from your esort you can set up Health saving accounts from your Escort so there's so many benefits out of trading under an escort and an LLC than just trading under your Social Security number so now let's discuss a little bit before I move on any questions in regards to the different type of Trader um the irc's um the difference between the LLC and the escort and TTS status before I move forward any question all right Joanne you can get off mute what your question um is there any advantages in terms of age so like if you're over 60 do you get any kind of Advantage tax advantage um when it comes to as a Trader um there is an advantage for a long term I believe that if you let's just say um on under all your longterm and that's again I have seen that as investor so there's some Advantage when it comes to in investors investors can actually get uh your gains and your taxes if you make I believe last year was 55 or more let me confirm that for you if it's 55 or more um gains on your longterm it's taxfree thank you no problem at all let's see who's next loo did I say that right yeah that's fine it's loo but uh yeah a quick question I'm trying to get an understanding so if you just growing your account and actually trading in the mix of your longterm as well and you're not taking any money out you're saying that you can still be taxed on that as well no and let me explain that so um you when you the question would be when are you taxed then on your Gams you are only tax on your gains when you close a um um a security so let's just say right um I bought Apple ticker apple and I bought Apple um I bought Apple in January we in August right I got Apple in January and so far I'm at 500 % on that call I'm not taxed on these gains until I sell Apple that make sense yes ma'am once I sell Apple that's when iros determined one how long I've been in that security two how I'm going to be taxed on it so if I purchase Apple in January and it's August that mean I've been on Apple for what seven months eight months under a year yeah year so that would be consider considered what short term or long term shortterm that would be short term and that means then the highest that I can be taxed on that short term is what 37% 37% but let's just say I um and and here's one of thing too that you want to make sure we're back at publication 429 there's something that IRS says that is very important guys what one of the thing that IR says is if you are going to be trading under an entity you want to make sure that you divide your um your accounts like I'm very um transparent of my about my accounts I literally have three accounts um I have one account where I day trade in that account is under Jolene LLC I'm trading that under a um an LLC okay I'm trading that you guys can see my scre right yes yes okay perfect um so I'm under that um under that account I'm trading under an LLC I day trade I scalp I swing trade on that account and then my other account that I have I'm trading under my social security number that account I only trade um quarterly and I I trade earnings in that account from either running it up or I'm running it down depending on the seasonality right I only Trade four times a year in that account and then the other account I have is my retirement account my rth account these um I've had Apple in them when Apple was like 115 120 so like that account I'm not touching so what I do is my the account that I trade under an LLC whatever money that I make in that account it funds my quarterly account and my quarter quarterly account funds my my retirement account so then I'm not always depositing funds into my bulage account and the reason why I did that is because IRS States it here too remember when I said if the nature of your trading activity doesn't qualify as a trade or business you're generally considered as an investment and not a Trader and it doesn't matter whatever whatever there's a special rule here too where IRS says the the special rule for Traders don't apply for those Securities held for investment a Trader must keep detail record to distinguish the security held for investment and the Securities in trading business here's the reason why because the account that you day trade in or the account that you swing that you are holding Apple in for long term you want to divide those account because the account that you dat trading in you in and out your long-term account you're not even looking at that that account is just either every quarter every quarter I deposit into my retirement account I do it in a quarterly base there's some quarter which I don't deposit why because that quarter may have been a loss for me so I don't deposit in my retirement account but you want to make sure that your in and when I say retirement account I'm talking about investment account okay so you want to make sure that the account that you have for your day trade s trade or C or scalp that account you trading it under an LLC see the securi held for in investment must be identified as such and Traders record on the day on the day the trade um occur so you want to make sure that you do divide those and not make those the same I did say solo 401K Zoom user um did that answer your question I want to make sure I did answer that question because I get to I can go like on without even knowing that I am going on and on yeah I see it got you started uh yeah it give me a little bit more clarity thank you so much so you're not you're not taxed on any gains without closing that that security okay okay I know the government is talking about being taxed on capital gains um but that law has not passed yet yet and it's so I hate when people jump into conclusion before a law has passed so you will find a lot of people will start talking about it and the law has not been passed yet so no one is taxed on any type of gains until that security is closed okay any other question before we move on yes um do you have a minimum like you um if if you using like um LLC to Trad in like do to trade um do you have a minimum that you have to be in um invest in the account that's a very good question who asked that who asked that I asking a question what's your name Jody I think okay okay so that's a very good question and let me tell you what iOS says okay iOS says right the rules is you must seek to profit from a daily market movement in the price of security not from dividends or Capital interest your activities must be substantial you must carry on the activity with continually irregularity typically uh your typical holding periods for security bought and sold the frequency and dollar amount of your trades during the year so iOS does not give a specific amount that you need to have in your brokerage for you to be trading under an LLC some people will say you need to have 25,000 what I say is you need to be in you you need to seek to profit from a daily market movement so here's what I mean by that I've seen people take a$ th000 and get it to 25,000 get it to 50,000 so as long you are in the stock market for those purposes and one of one of the biggest thing that iros says is that the extent to which you Su the activity to produce income for livelihood what does that mean this is a business you are running a business if you're going to start trading under entity it is just like you were opening a trucking company or if you opened your cleaning services or if you open your marketing it is an entity and it is not a hobby so if you are in business what are you in business to do is to make money you're not making money in that business and it is a hobby so you want to make sure that you are trading under an entity to produce income does that make sense so IRS does not give the specific amount that you need to have in in your brokage account to start trading under LLC what I usually say is you want to start off with the an amount with the intention of growing it does that make sense yes but do also you have to um um you have to execute um and am out of trade for the year yes you need to be trading about um I would say two to three or even four trades a day so let's just say um today right today was crazy um my puts were getting killed my cars were getting killed it didn't matter what I do I was getting killed right so I usually stop trading around 11 let's just say uh I did two trades today and it didn't go well I got out of the market I don't care I got out of the stock market um let's just say tomorrow um to tomorrow I start trading and um I did three trades it's okay let's just say the next day I only did one trade that's fine well let's just say FR did I did four or five trades that's great as long it if and that's under the TTS status okay as long you're trading about 740 trades a year which is about um three to four trades a day then you are good under an see IR is not specified that you need to have a certain amount but you need to have what your activities must be substantial meaning you cannot you you must carry on the activity on continually and regular what that means is that you can't be in the stock market today and tomorrow you're not or you can't you know you can't be in the stockk you can't be like oh I trade today and then you're not in the stock market again to like two months later or 3 months later it's kind of like me saying I'm in my business today tomorrow I'm not you're running an entity that make sense any other question before we move on okay I'm sorry I have a quick question this is Mita hi Mita yes ma'am uh yes ma'am I was trying to clarify um when you were saying make sure you divide your account so for example um I have several accounts so I have like a ra and then I have an account I do um hard shares in I have account I do options in and then I just have an account just with money sitting so in the event I can't get in another account I do whatever in but you're saying to separate them on what you do in those accounts I would say it's not good to have a whole bunch of accounts because it's kind of like me saying I have seven businesses how are you managing all of those accounts how I would say I have difficulties doing that I have um like6 accounts so it's pretty so I rotate like it is which one I would say yeah I would say I would say the maximum I would say someone maximum account someone should have is four I have three the um the only reason why I have this my four I have a fourth account what I I call it Serenity account it's for my daughter because she um I PID $30,000 a semester for school so I try to trade that account to see if I can make a little bit money in it so then when the semester come for me to pay for her school I can actually take that money out but what you don't want to do is have a lot of account because you you want to be able to manage your account respectfully okay and can you walk me through really quickly you said you utilize your um let me look at my notes you say you utilize your um account number two your personal account and you trade in that approximately four times a year and then you use the profits from that account and roll it over into your Roth ra yep that's that's that's my um my favorite account is my uh my quarterly account the and the reason why I um I could have I could have put the quarterly account under um under an LLC I just chose not to but the reason why is because my trades like say for an example I'm if I'm trading earnings um I usually wait till um uh um the earning is done right um I usually the the companies that I'm trading earnings on um I I usually watch their their last three to four earnings I usually review their balance sheets um and I usually look review their seasonality to see if this season is a season where they're good or bad um and I only even if I purchase I'm usually purchasing that call um two months before their earnings coming up or depending on what type of earning they're going to have I will either get in a call after the earning or before the earning so I'm not playing the earning on the earning because I'm usually out before the earning come out so even with that account I could I could that account can be under a LLC I chose to have it under my social instead okay thank you that gives me a lot of clarity and my last question is do you utilize your primary account the LLC account to fund your uh personal account yes I do because one of the thing I hate doing is taking money from my um checking on my saving and depositing it into a bookage account I don't know you guys but I don't like touching my money so let's just say this quarter had a bad quarter I will not necessarily punish myself but I will put myself in timeout and get back on the board to see what it is that I did wrong I'm not just going to automatically emotionally go transfer money from my account and put in this brokage account start trading again and start losing money again you you you want to move with a plan plan like before before Lawrence get into a car right he plans it out it's the same way with your taxes guys it doesn't change it's the same way with trading under entity but the beautiful thing is Mark to Market election and I'm going to teach you guys that now with adding Mark to Market election what it does is it eliminates the was sale Rule and what the was sale rule is um and a lot of you guys probably have was still and you guys don't even know you have it so anytime you purchase a security and you sell it at a loss you have to wait 30 days or more to repurchase that security I'll give you an example I purchased ticker Apple I got on a cough my junk is down 20% because that's my risk management 20% I got out of it if I take that Lo and I write it off IRS says you need to wait 30 days before you repurchase that ticket if you purchase that ticket within that 30 days you are going to be charge a watch s r on your 1099 B if you traded last year go look at it and look for the watch sale is sitting right there some of you guys are getting charged watch sale and you don't even know it I had a client that had over $20,000 with a wash steal and he's a scalper but once he start trading under an LLC and elected as a mark to Market election it eliminates the wasu and the reason why iros came up with the Yu is because a lot of the big dogs what they would do is they would wait till December and they would look at their portfolio and anything that they were losing in they would get out of so they can ride it off on their taxes right and then once January come in boom they would repurchase it just kind of like what took place right um couple of days ago a lot of the retail Traders right got scared and they got out of a lot of their stuff and one when when when you when everyone is scared in the market you should be happy because you know what happened the retail Traders lost about1 billion doar right in the stock market and you want to know what those investors did they bought 14 billion so the iOS was like no no no that's not fair you need to wait 30 days before you can repurchase it so it eliminates the wash sale rule it allows for unlimited net loss to deduction in a single year remember earlier I told you guys that um you can only write off $3,000 per year well with the mark to Market election if your loss was $20,000 you're able to write off that $20,000 you can write off your total net LW okay now the thing is it can be made on there's two ways you can get Mark to Market election that is through TTS or trading under an entity that's it so if you're trading under your social security number you would not qualify for TTS status why are you doing this to me okay so the requirement is to qualify for TTS make the election prior to the tax tax year you have to be trading under LLC or escort and make the election within 75 days of setting up the entity so when we create the entity for all of our clients to trade under we make sure that we do the mark to Market election letter we send it to IRS for our clients okay stop doing that okay so how do you file for the mark to Market election you will file form 3115 which is an application to change the accounting method um so let's just say form 3115 is file the first year you file your MTM so let's use the example 2022 well we're in 2024 so let's use 2023 if 2023 which is um um let's just 2024 if 2024 will be your first year right with MTM you would send a statement of election with your 2023 tax return and form 3115 would be filed with your 2023 tax return yeah 2023 tax return okay so let's talk a little bit about any questions about Mark to Market elections okay great yes ma'am um so if you have um rental properties as well as um you um trade stocks how do you go about doing that do you use two different PX prepars for that or because you have some people that specialize in this you have some people specialize in the rental Arena okay okay so you wouldn't have to worry about that and the reason why is I would say 80% of my clients are Traders right 80% of my clients are startups entrepreneurs and Traders and as a Trader or um you you are an investor right um so you would not need to use another accountant or another CPA off fir would be able to assist you um a lot of our clients that are trading once they start making money in the stock market they are they are investing in real estate and we we're the one that's assisting them in that area as well thank you so you not yeah you would not need a different account um a lot of them it's a lot of them are investing in real estate there's three things our Traders do and that's because we we have to help them move the money um it's real estate or we're buying businesses um we're helping them buy businesses um and purchasing business doesn't necessarily means it needs to be something that you good at or you know because um it could be something that you are just collecting can income from so um in those areas we can we definitely do very well in helping our client um let's go back here I don't know why this thing likes to go back for me instead of forward where are we okay so now it's very we we talked about the three areas right you can tra as as Traders so you can trade stock and Equity options broad-based index and index option future and future options and o too we do help clients with Forex I would say we have a lot of clients that are in the Forex industry and a lot of clients in the option industry um Futures not so much I don't know why but um they they convert once they become a Forex Trader I'm not sure why they they convert to future I I don't know a lot of our clients do that so what form do you need to use so if you are an individual self-directed investor that is a person that's Trad under your social you would just need your 109 your 1040 that's all you would be completing 1040 form $ 8949 all right if you're trading option an equity option you're completing form $ 8949 if you index index option form 6781 future future option 6781 if you're trading index index option or Forex I mean is also forms on 6781 if you're trading under an entity and you elect but uh without electing Mark to Market election um you would do form 10:40 you would complete your 10:40 if it's an LLC you would be completing Schedule C you'll be completing your schedule C if it is an esor you'll be completing 1120s if it is a c you'll be completing 1120 now even though you are trading under an LLC you still need to complete form 8949 form 6781 depending on um if you trading option stocks index future or Forex now if you're trading under an entity and you elect Mark to Market election if it's an LLC a single member LLC then you will be completing Schedule C if it's a partnership you will be completing 1065 if it's a s 1120s if it's a C Corp 1120 and you would only be completing form 4797 as a mark to Market Al setion all right so we went um for um stock stock and option um longterm it's over a year short term we said under a year index index option it's 6040 that is the Blended tax rate future is also 6040 um and if you're trading as an entity and with Market to Market everything is just ordinary all right so let's recap a little bit investor status can't deduct business expenses qualify for TTS as an individual set up trading under entity LLC or esort subject to was sale rule Mark to Market election learn the was sale Rule and how to avoid it right you are limited to $3,000 per year in the net loss unless you do Mark to Market election all right we talked about the Y what triggers it um we went over um the loss being disallowed and added to your cost base for the next purchase you have to wait the 30 days and if you don't wait for the 30 days and you're trading under your social security number they're going to charge you okay uh let's see so how to avoid the wash s elect Mark to Market or get out of all your wash sale by the end of the year and stay out of them for at least 30 days otherwise the loss Will tied up and the wash sale will carry over to the next year all right let's see future Forex index we did talk about okay so for future and Forex the forms is a little bit different under the Blended tax where you would complete form 1256 the 1256 contracts was 60% longterm 40% short term okay um when it comes to fut all right that's pretty much what I have for you guys um when it comes to the services that I do provide right um I do we help our clients um create the entities U we create the entity for you and the reason why I prefer that is because I find that a lot of client create the entity for them to trade under and then I usually have to clean up they either create the wrong entity or they're not at a place yet where they should be trading under an entity so so here's what I usually recommend if um if you just started in the stock market um I would say um master your craft right but if you starting to be a profitable Trader get on the game earlier than later start trading under an LLC so we do um we do have um our packages is really easy um we our starter package we create everything for you everything you need to legally set up the trading business the package is tailored to meet your needs when it comes to making sure the entity set up with the entity audit we do the article organization prep preparation article organization State filing retain the Ein for trading business one of the questions that people usually ask me hey Abby I already have an LLC can I use that to trading no you can't the reason why you can't is because when you were creating that entity you told IRS why you created it if it was not for trading then you cannot use it and the reason why too is because your current LLC your current LLC right now is tax and self-employment tax all your gains and losses from um trading is not subject to self-employment tax so you want to make sure that you are um you the entity is created specifically for trading um we also do your mark to Market election um our clients that we create our entity for that is um we usually recommend that we also handle the taxes because what I tend to find is they go to either someone local or someone that don't know anything about trading and they do their taxes and didn't didn't do it correctly um so our starter package is the entity setup and then we have our Full Experience The Full Experience is completing the um entity setup creating the operating agreement providing you with your annual minute um giving you the deduction of all what your deductions will be um we also do tax planning the midyear tax planning and we complete the business the personal and the state tax return and our last um one that we do have is our monthly experience um monthly experience is everything that also includes some month um quarterly check-ins your monthly bookkeeping we keep the books as well to make sure you're allocating all of your expenses correctly um so it's every month that we keep your books and we meet every quarter to go over um your financial on a quarterly base okay any questions for me loo loo have a question so you can take yourself off mute [Music] okay we'll go to Joanne um a clarification question okay it sounds like one it's too late to switch to a um you know trading under a company or Corporation um so I think I heard uh and I'm a newbie so maybe I slow it up go ahead and get my my education and start back in January under uh a corporation is that a fair statement um it's a fair statement um have you already started trading I have um we don't want to talk about it that is okay I totally understand um I do want to let you guys know um you guys can follow me on Instagram one of thing that I do is teach a lot like I go live on Mondays um I teached on over 35 different discords um that have traders that runs from I would say 5,000 member I one that have 14,000 members I don't know how to keep up with 14,000 members I can't even keep up withot my 250 clients but um I teach a lot so to answer your question um it depend on if you want if you want let's just say you have more than $3,000 worth a loss right now I would say um create your entity so then you can write off create your entity um I thought it was too late I thought because I didn't do it at the beginning of the year no no okay so let me help you guys out um it's there iOS does not have a specific time for you to start a business it you do not you do not have a specific time to start a business so that's why too when we create your entity one of the question IRS will ask is when would you like this entity to be effective so we can literally say hey IRS we would like our entity to be affected January 1st 2024 does that make sense it does so I have a escort and can I flip it okay so that's that's what we said earlier when you are creating that entity that is an esort why did you create it for a consultant okay we may you we may be able to use a consultant yeah we could use a consultant did you ever did you ever specify what type of a consultant I don't think so I could look it up okay that's no problem I would say um let's get together so because one of the things I would want to do is do an audit on that and I would be able to once I do the audit I can say okay let's use that for trading awesome I will get with you later yes ma'am um I think it was it Joanne or loo that was next you guys gotta get off mute Joan could go ahead since I already asked a question okay how you finished yeah you gave me all my answers I'm gonna set an appointment okay perfect all right Loa you're next uh my question was so if I um the active account that I already have I couldn't tun on that particular account up under LC or some that sort you said the type of account are you talking about the type of entity you already have well no the actual Trading account that I'm trading up on my social and a very good question I love that question love when people I love when people ask wonderful okay that's a beautiful question so you can always transfer assets but you cannot transfer account so what does that mean Abby so you let let's just say right I have um let's just say I have a um um I have a bookish account with um with Vanguard currently speaking right let's just say I have an account with Vanguard and I have $5,000 in that account right I can transfer I can transfer that $5,000 I can transfer that $5,000 from my social security number account to my LLC account I can transfer all my Securities meaning I can transfer my Apple my Microsoft my Amazon I can transfer my Google you can transfer asset but you can't transfer the account so what I one of the question people will ask me is just like you just ask hey Abby can I transfer my my account no you can't but you can transfer your asset okay thank you that make sense so you can start moving yeah you can start you can start moving things um another way that I can explain this okay so I have my bullish account that's under the social security number right what if I want to start moving stuff from that account to my LLC account I can do that so you can move the assets assets are your your ticker asset is the money you have in the account but the account itself you cannot transfer can you do that um um to a retirement account too if it's your retirement account you shouldn't be touching it so why would you want to do that you have to you have to give me a little bit more detail no like example like I have my um my regular brokage account my individual account and then I have a security so like I would like to move it to my um you can do that to my oh yeah you can do that you can move assets you can always move assets I don't know why you would want to move you that's basically like equal to your to your cont um um annual contribution yeah if that asset has money in it yes if that asset is cash so let's just say here's what I'll do right so in my quarterly account let's just say I did good and I did a $10,000 for that quarter and I transfer that $110,000 into my SCP Ira because with the SCP Ira guess what I can do a pre-tax contribution of $61,000 that's the beauty of trading under under an entity guys as a current individual right you can only have what $7,000 on an IRA when you trade under an entity yep you can you could put up to $61,000 see that beauty so like my my client he was so so so so so so happy I made $2 million 27 years old he don't know what to do with this money so we're moving this money we're putting $61 we're putting $61,000 in an SCP we're putting money in a solar 401K we're moving that money we're moving that money so he's not giving 37% of it to IRS um is it is it Asia Asia yes please correct me if if I said your name wrong oh you're fine it's Aisha yes okay I just going a Clarity um so no matter how much money we make in the market trading we don't qualify for the entity or like the LLC unless we are trading what is it a 700 and something trades a year is that that's only for the that's only for TTS status only for pts status mm not for LLC okay but with the LLC we'll get certain tax breaks with that oh yeah you get all tax breaks I'll like I have like I think over 80 deductions you can take trading under entity so pretty much everybody needs to be traded up under entity is what you're saying ma'am yeah I don't even know why y'all want to give IR your money like that but oh okay cuz I've been trading up under my social but I'm still learning so but I do plan to possibly make more money this year so if you're looking at POS if you're looking at possibly making money this year then you need to you need to you need to create that entity and start trading under it okay here's the reason why here's the reason why I say this like I'll have people that says you know what Abby I want to wait till January boom they had a great quarter and then they come to me in January for me to do their taxes and then they they they give him funny faces because I tell them oh this is your total liability this is your this is how much you owe Ta on taxes they're like well why I owe that much on taxes well we cannot deduct any of your expenses okay and here if you are paying Lo for uh for the Discord or for U as a mentee that's a deduction that's a deduction that's an expense if you purchasing your home office is a deduction your cell phone bill is a deduction your light bill is a deduction vac of your like I just went to the tech and wealth Summit you think I actually pay for that out of my pocket the devil is a liar so tax benefits were created for business owners not individuals so if as long you are a W2 and you are functioning under your social security number there's no tax benefits for you okay okay good thank you you're welcome is it Nixon yes ma'am thank you Abby thank you for this class has been uh it's been educational uh with regards to what you were just saying um with everything being a tax tax deductible what if you're in a position where you haven't been profitable yet that's okay okay would so do you still recommend you still recommend okay get started with your corporation and still um put everything that you purchase for example the the home office the phone put those expenses in as well even if you don't have absolutely absolutely here's the reason why Nixon are you a w too do you work yes yes all right um do you make money yes okay so at the end of the day right what would do you believe lowers your tax bill or lower net income all right so we have gross income and we have net income gross income is what we make net income is what we have left right so your net income it determines what your tax liability is so let's just say right you make $100,000 I'm not I do not know how much you make we're using this as an example right let's just say and I'm going to share screen because I like everybody to use this and I teach this on tax planning um I believe not I believe I do have um a tax proof challenge U that you guys can actually um register for B bird is only $49 and then it's $100 that I'm it's tax planning on September 6th I teach this in tax planning so let's look at let's say you make $100,000 I love math so let's do the math 2024 tax brackets let's look at the tax brackets uh let's see use them I don't know what what this is these other people are okay let's just say are you single no I married two kids you married two kids beautiful I like to married two kids people single people get on my nerve single people this they make a whole bunch of money and then they want to know why okay so let's just say you you married right let's just say you guys you both are in the range of um 89,000 so let's just say 89,000 so you at a 22% tax bracket which is sick right um I I I I always try to get my clients between those three once you get in the bottom here then then we we have to move money so let's just say you're at 22% right you at this 22% um and you're trading under your social security number and you are and you had let's just say $5,000 we're just saying $5,000 right let's say you had $5,000 worth of expense and you had a loss right so that's $5,000 with a loss plus the $3,000 that iros gives you if you had three thou um if you had if you had $5,000 at a loss sorry I'm GNA start this story all over again you had $5,000 at a loss right even though you have $5,000 that a loss iOS only gives you $3,000 you can only write off $3,000 of your loss for seven years we said so we have $33,000 of a loss plus let's just say you had a total of $55,000 for expense whatever the total that Lawrence is charging you as a mentee right plus whatever any expense that's related to trading plus your home office expense plus your phone bill electric bill blah blah blah blah plus having Abby as an accountant help no your bills going to be more right plus having Abby as an accountant now you're looking at a $7,000 bill of expense plus this $3,000 to trading under entity um we're going to subtract this $10,000 from $ 89,4 41 now you're looking at $79,000 that you are going to be taxed on all right 79,513 451 the first the first 0 to 22,000 you are only taxed 10% so we're going to subtract that by 20,000 right so $20,000 of that 79 is taxed at 20% at 10% then the first 22,000 to 89,000 is tax at 12% so your total was 79,513 right now let's use let's go back to you making $889,000 if you made $889,000 right here $ 89,4 51 and you had a $3,000 loss I mean $5,000 but I only allow you 3,000 your net income is 86,000 so what what I'm saying is at the end of the day the lower your net income the better the last tax the less tax you p that's why at the end of the the benefits it's not for a W2 as a W2 what can you deduct nothing right makes sense okay um so now the only difference in here I'm I'm I live in Canada so the rules are a little different um and of course so I'm going to be doing my due diligence converting a lot of the things you said So currently what I'm doing is I am trading options in my um I think for you guys it would be Roth IR which here is taxfree savings account uh so essentially what I should now do move on to creating uh my LLC and then start trading under that once I start trading under that is that also a tax advantage or is just like a margin account like would I be trading in my tfsa still with under a corporation how how does that work you can do that I have a lot of our my clients that do trade under they trade under their raw I don't I don't do that is it something that I recommend not necessarily because I don't like to touch when it comes to my investment I don't like to see it let a long touch it because I can only see me making a bad move then I'm gonna be depressed and gonna need therapy and I don't have time for therapy and that's another money that I'm going to make because I made a bad move so you're keeping that account for long term I leave it alone yeah I don't even see it I don't touch it okay so focus on how just doing like a margin account yeah you can do that okay understood thank thank you so much you're very welcome I am absolutely late for my 8 o'clock so here's three things that I would like from you guys if you guys could do for me if you guys enjoyed this class one please send us a review um to please follow us at um Abby the account accountant on Instagram we are in Twitter LinkedIn and if you would like to hire us as your accountant for 2024 we schedule a discovery call um if you are going to schedule a discovery call let me know one of the thing that I do is whatever the fee is for the discovery call I make sure that we deduct it from your total fee um it has been an honor and a privilege to serve you guys however way that I can assist you guys please let me know before I leave any any other questions you guys are very welcome now go make this money and hire me as your accountant yes M appreciate you coming in tonight Abby thank you you're very welcome Lawrence and thank you all guys have a wonderful wonderful evening all right guys I'll see you guys tomorrow everyone Take Care thank you for