Trading stock options is not self-employment

Hi June,

First, I just finished your book “Self-employed Tax Solutions” and was impressed how clearly you presented a tax code that is so screwed up, it is an embarrassment to anyone associated with writing or enforcing it. Your book answered most of my questions on self-employment and I thank you for that.

I do have a question, though, on being self-employed. I lost my job as a supervisor last year due to the plant closing and have been living off the profit I am making on trading stock options.

My wife has a part time job, however, all our living is coming off my investments.

At tax time, can I just state that I am unemployed and pay regular taxes on my investment income or do I need to pay SE tax and treat the trading as a business?

I am 54 and living in PA and would not have many deductions if I were forced to list my trading as a business. Any thoughts on this or maybe claiming early retirement?

Thanks for any help,
Bob


Hi Bob,

You are unemployed and enjoying the fruits of your previous labor. You are not self-employed. Here's a question from another trader If you are your only client ... you're not self-employed.

Glad you found my book to be so accessible. Thanks for letting me know.
June