The Ultimate LLC for Day Traders: Unlock Trader Tax Status & MTM
Stop overpaying in taxes and trading with personal liability. Our Day Trader Pro Package establishes the professional framework you need to qualify for Trader Tax Status (TTS) and elect Mark-to-Market (MTM) accounting—the most powerful tax strategy available to active traders.
Are You Leaving Money on the Table?
If you’re an active day trader operating as an individual, you’re facing two major disadvantages: the $3,000 annual capital loss limitation and unlimited personal liability for your trading activities. This means a bad year in the market could impact not just your portfolio, but your personal savings, home, and other assets.
Operating through a properly structured LLC for day trading is the first step to solving these problems. Our Day Trader Pro package goes further, giving you the complete framework and documentation needed to operate as a professional and pursue the most advantageous tax status available.
The Core Benefits of the Day Trader Pro Package
Qualify for Trader Tax Status (TTS)
TTS is a designation based on your trading activity. Our package helps you establish the business intent and provides the documentation framework the IRS looks for to prove you are “in the business of trading.”
Elect Mark-to-Market (MTM)
With TTS, you can make the Section 475(f) MTM election. This allows you to deduct 100% of your trading losses against other income and completely bypass the frustrating wash sale rule.
Deduct Business Expenses
As a formal business, you can deduct legitimate expenses essential to your trading operation, including software, data feeds, computer hardware, education, and home office expenses.
What’s Included in the Day Trader Pro Package
- Strategic Consultation: A one-on-one call to review your trading activity and confirm this package aligns with your goals for TTS and MTM.
- LLC or S-Corp Formation: We handle the complete state filing for your new trading entity.
- Trader-Specific Operating Agreement: A custom-drafted legal document that establishes your business purpose for trading, a key factor for the IRS.
- EIN Application: We secure your new business tax ID number, essential for opening your business brokerage and bank accounts.
- The TTS & MTM Election Kit: Our proprietary kit including a Business Trading Plan template, Trading Log template, and a sample MTM Election Statement to provide to your CPA.
Common Questions from Day Traders
Who qualifies for Trader Tax Status (TTS)?
TTS is not a simple election; it’s a determination based on facts and circumstances. The IRS looks for substantial, frequent, and continuous trading activity with the intent to profit from short-term price movements. Our TTS Kit provides templates to help you document and demonstrate that your activity meets these standards.
How does an LLC help me avoid high taxes?
The LLC itself doesn’t avoid taxes, but it establishes the business framework that makes you eligible to elect Mark-to-Market (MTM) accounting. MTM is what allows you to potentially deduct 100% of your trading losses against other income (like a W-2 salary), which can result in significant tax savings compared to the standard $3,000 capital loss limit.
What is the deadline for the MTM election?
Deadlines are critical. For a new entity like the one we’ll form for you, the election generally must be made within 75 days of formation. For individuals, it’s typically April 15th of the year you want the election to take effect. Our consultation will ensure you are clear on your specific timeline.
Stop Trading Like a Hobbyist. Start Operating Like a Business.
The right structure is the difference between paying excess taxes and maximizing your returns. Schedule a private consultation to discuss your trading style and get a custom quote for the package that will professionalize your trading operation and save you money.