Is income from binary options taxable
Bryan's videos for beginners are a gold mine…fabulous info and tips. Are profits made on binary options taxed as capital gains for US traders? If so, I'm guessing they would be considered short term gains which would certainly take a big bite out of your profits. I apologize if this has already been asked and answered, but I can't seem to find any information on this.
I know that Nadex sends out an annual B form, but I'm not sure I want to go with them due to their fees. For any US traders out there who use overseas brokers, assuming your profits are taxed, isn't sorting out a year's worth of trades every April somewhat cumbersome?
How does it work? Thanks so much in advance for any insights anyone can offer, and again…wonderful website! JK answer is get an accountant! Thanks very much for the quick response.
Wow…that's a pretty sweet deal! I just figured any profits would be considered income and as such would have to be taxed, regardless of where they come from. I have a meeting with my tax guy in a couple of weeks, so I'll take your advice and discuss it with him then. Nadex's fees are practically speaking irrelevent; 90 cents each side of a dollar contract is nothing; the spread on most foreign brokers are your bigger problem.
Regulated US brokers offer a third option. You are required to fill out a tax declaration form. The broker turns the form into the IRS and taxes are deducted from your earnings as you trade. If taxes are taken automatically with each trade, you may not have any taxes to pay later on.
Remember to pay both state if your state taxes earned income and federal taxes. Binary options trades are taxed on both levels. The federal amount will be higher than the state. Instead, hire a tax professional to correctly report and file your trading income for you. This way you can focus on finding the best assets versus choosing the right IRS forms.
This website is out of date, do not rely on it for current information about binary options.