Day Trading Tax Rules


Ensure you qualify to file your taxes under the status of a trader. According to the Internal Revenue Service (IRS), to qualify you must trade stocks regularly and attempt to profit from the market's daily price movements, and your trading activity must be substantial. Under the trader status, you are able to write off any expenses and offset all your losses to your income if you choose the mark-to-market accounting option.


  • Traders who are married are able to double their standard deduction under the Families Tax Relief Act.

IRA, 401k and Managed Accounts

  • Trades under an IRA, 401k, or a managed account do not count toward your trader tax status.

Wash Sale Rule

  • Day traders that do not elect mark-to-market account option or any securities that a trader does not claim under mark-to-market are subject to the wash sale rule.

    The rule states that, if an investor trades the same security within a 61-day period (30 days before and 30 days after), the loss cannot be deducted.

Related Searches


  • Photo Credit Chart analysis image by Dmitriy Lesnyak from
Promoted By Zergnet


You May Also Like

  • Can I Day Trade My Roth IRA?

    Day-trading profits can be slashed by capital gains taxes and trading fees. Tax-protected accounts -- specifically Roth IRAs -- are extremely appealing,...

  • Tax Implications of Day Trading

    Day traders invest actively throughout the day to profit from small asset price fluctuations. Consider day trading tax implications when calculating your...

  • How to Trade Stocks in 401(k) or IRA

    Roth Individual Retirement Accounts (IRAs) and 401k accounts share some similar features, such as the tax-free growth of the investments within, but...

  • Stock-Trading Tax Rules

    Selling stock might not be your primary source of income, but it's still something that you have to report on your income...

  • IRS Tax Laws for Day Trading

    Day traders need to be aware of the tax laws related to trading stocks. Day traders are required to pay tax on...

  • IRS Day Trading Rules

    For individuals who actively trade the financial markets, the Internal Revenue Service (IRS) offers special treatment and taxation of the gains and...

  • Income Tax Rules for Day Traders

    A day trader is a stock investor who usually makes many trades during the same day. These stock positions will usually be...

Related Searches

Check It Out

4 Credit Myths That Are Absolutely False

Is DIY in your DNA? Become part of our maker community.
Submit Your Work!