For traders who qualify as a "trader in securities" (Schedule C), trading platform fees, real-time market data subscriptions, and brokerage commissions are deductible as business expenses.
A day trader paying $18,000/year for Bloomberg Terminal, $3,600 for options flow data, and $2,400 in platform fees deducts $24,000 — saving $7,920 at 33%.
Traders (Schedule C) can deduct platform fees; investors (Schedule D only) cannot. The distinction between trader and investor status is critical.
Day traders who qualify as "traders in securities" can elect mark-to-market accounting under Section 475(f), converting capital gains/losses to ordinary income/losses and eliminating the $3,000 capital loss limitation.
A day trader with $80,000 in trading losses: without MTM election, only $3,000 is deductible. With MTM election, the full $80,000 is deductible — saving $26,400 at 33%.
The MTM election must be made by April 15 of the year it applies. New entities can make the election at formation. Consult a tax professional before making this election.
Each cryptocurrency trade, swap, or exchange is a taxable event. Proper structuring — holding periods, loss harvesting, and entity selection — can dramatically reduce crypto tax liability.
A trader with $200,000 in short-term crypto gains who restructures to maximize long-term holds and harvests $60,000 in losses saves $37,000 in taxes.
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Most taxpayers leave the QBI deduction unclaimed — it reduces taxable income by up to 23% starting 2026 under the OBBBA.
HSA contributions offer a triple tax advantage — deductible, tax-free growth, tax-free withdrawals.
Charitable donations of appreciated stock avoid capital gains AND generate a full fair-market-value deduction.
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