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Call (866) 681-2140
If you trade often, the IRS may treat your trading as a business, known as trader tax status. A CPA for day traders checks whether you qualify, files your 475(f) election on time and reconciles your 1099-Bs.
Call (866) 681-2140
We check your trader tax status against IRS factors before you claim it.
We file your Section 475(f) election statement on time and prepare Form 3115 for your first mark-to-market return when you need one.
We give you a fixed quote before we start and reply within 24 hours once you are a client.
We compare your holding periods, trade count, dollar volume and hours against the IRS tests, then give you a clear yes or no.
We draft the Section 475(f) statement, attach it on time and prepare Form 3115 if you are switching accounting methods.
Form 4797 for marked-to-market trades, Form 8949 and Schedule D for investment accounts, and Schedule C for trading expenses.
We set timely estimates using your trading profit and last year's tax, reducing underpayment risk after a strong year.
We keep the books for your trading business and record the positions you hold for investment on the day you buy them.
We help traders set up LLCs and S corporations, with payroll and separate returns where required.
If you filed as an investor in a year you qualified as a trader, we amend the return to claim your trading expenses on Schedule C. The IRS allows that within three years of the original filing. You cannot add the 475(f) election to a past year.
You do not file anything to get trader tax status. Under IRS Publication 550, you qualify only if you meet all three conditions:
The IRS also weighs your typical holding periods and the frequency and dollar amount of your trades. It looks at how far you rely on trading for a living and the time you spend on it, and sets no minimum number of trades.
If you fall short, the IRS treats you as an investor. We review your trade history against these tests before you claim the status, because IRS examiners look at the same facts.
With trader tax status, you deduct trading expenses on Schedule C. With the 475(f) election as well, you report gains and losses as ordinary income on Form 4797, Part II.
| Investor | Trader with the 475(f) election | |
|---|---|---|
| Net trading loss | Capital loss, deductible up to $3,000 a year ($1,500 married filing separately) | Ordinary loss, deductible against wages and other income |
| Trading expenses | Margin interest only, if you itemize, within the investment interest limit | Schedule C business expenses, including margin interest |
| Wash sale rule | Applied; you add the disallowed loss to the new shares' basis | Not applied to marked-to-market securities |
| Open positions on December 31 | Taxed when you sell | Treated as sold at fair market value |
| Self-employment tax | None on trading gains | None on trading gains |
If you qualify as a trader without the election, you get the Schedule C deduction and the investor treatment for losses, wash sales and open positions. The IRS sets the $3,000 cap in Topic 409.
If you trade Section 1256 contracts, such as regulated futures or broad-based index options, you report gains and losses 60% long-term and 40% short-term, whatever your holding period.
Say you lost $50,000 day trading in 2026 and spent $8,000 on data and software. Assume you file as single, with no other capital gains or wash sales, and enough other income to absorb the loss. In the third case, you also made a timely 475(f) election.
| Your status | Deducted for 2026 | Carried forward |
|---|---|---|
| Investor | $3,000 of the loss | $47,000 capital loss |
| Trader, no election | $11,000: $3,000 of the loss plus $8,000 of expenses | $47,000 capital loss |
| Trader with the 475(f) election | $58,000: the full loss plus expenses | $0 |
As an investor, you cannot deduct the $8,000 of software and data expenses. If you elect 475(f), we check whether the IRS limits how much of a large business loss you can use this year.
Deductions by trader status and 475(f) election
A $50,000 trading loss and $8,000 of data and software costs in 2026.
$47,000 of the loss carried forward. Expenses not deductible.
$47,000 of the loss carried forward. Expenses on Schedule C.
Full loss and expenses deducted. Nothing carried forward.
Assumes a single filer, no other capital gains or wash sales, enough income to use the loss, and a timely 475(f) election.
Source: IRS Publication 550 and Topic 409.
If you file Form 1040, attach the election statement to your 2026 return or extension request by April 15, 2027, to use mark-to-market in 2027.
A new trading entity filing its own return, with no prior return due, must record the statement within 2 months and 15 days of its first tax year's start. It attaches a copy to that year's return. You file Form 3115 if you used another accounting method before. If you miss the deadline, your next chance is the following April.
Professional and quick! They handled options, cryptocurrencies, and personal investments well, which were my pressing needs for an accountant. They also answered my questions and offered extra time for longer conversations. Would recommend!
Upload broker 1099-Bs, trade logs, a record of your trading hours and last year's return through our encrypted portal. We work from the reports you send and never log in to your brokerage.
A day trader CPA or Enrolled Agent reviews your trading record and explains which forms and deductions you can use on your return.
You see the price before any work starts, with no hourly billing.
We file your return with Form 4797, Form 8949 or Schedule C as needed, then set your quarterly estimates for the year ahead.
As your CPA for day traders, we set a fixed fee from these factors:
The light end is one brokerage account, no election, and one federal and one state return. These are the factors, not a quote.
Send a short note on how often you trade, which brokers you use and the returns you file. A CPA for traders on our team replies with next steps and a fixed quote.
Or call (866) 681-2140.
