Friday, June 1, 2007

If you are your only client ... you're not self-employed.

June --

As a forex day trader; may I open a self employed 401K account; fund it with whatever the allowable contribution might be - - - and then proceed to conduct the same day trading activity within the confines of the 401K account - - - realizing the tax deferral benefits on any gains?

Thank you. DD


Hello DD,

A 401-K is a pension or retirement account. A 401-k for a self-employed is called a uni-k or solo-k and is only one kind of pension plan available to indies.

In order to be eligible to have a self-employed pension you must be self employed. That's explained at this post Self-employed or Employee: It's more than a name . A day trader -- whether domestic or foreign -- who trades only for himself and does not have a commodities license is not a self-employed.

Good idea but it won't fly.

Best, June

To learn more about indie taxes and Self-employed Tax Solutions please visit http://www.junewalkeronline.com

No comments: