Trading as a Business - One of the big benefits

Brian McAvoy here with Inside Out Trading on YouTube known as Trader Brian. And today, as far as treating your trading as a business, we're going to get to talk about one of the, actually one of my favorite topics and that is having your trading set up as a business, a proper business. The best thing about it is the expenses that are related to your trading are all write offs. So yeah, you know, you're wanting to get yourself a new computer, a nicer printer, broadband access, hopefully you've already got that paper for your printer cartridges, office supplies, all that kind of stuff. Those are business expenses. Now if you're not, you know, if you're just trading as an individual, you haven't actually set your trading up as a business. Those are just expenses. That's money gone. But if you actually have yourself set up as a business, then all these things become tax write offs. And that's terrific because they are part of your business that you set up as a business with the intention of making money. So these are expenses that are necessary for you to be able to do that or to run your business. And that's really cool. Personally, I love it. No, I mean you do have to keep it on. You do still have to be honest about it. You're getting these things with the intention of using them in your trading business and that's what you're getting them for. The intention really is what's important. Now the cool thing about it is though, if you are getting say self help books for your business, those are not tax write offs, they're not just personal expenses. And that's cool. If you want to get other educational materials for trading or how to set up your trading as a business or pretty much anything related to your trading business and your training as a trader, these at the end of the year are going to add up nicely and you get to write them off your taxes. And that is extremely cool. If you need to get a webcam to communicate effectively with your broker, that's a business expense and that's cool. It really is. Here's why I get so jazzed about it. When I was a young man fresh out of college, I just went to work for a company. I did the traditional route. I went through school, got a good job with a good company and I was an employee. And when I filed my taxes, I was just an employee. I didn't have squat for tax write offs. Well, not too long after I graduated I wound up getting married and my wife decided to what she was going to do for her occupation and what she wanted to do was to run a daycare out of our house. And that worked out great. I had never really realized the power of having a business, particularly one to run out of your house. Now when my wife was running the daycare, it was great because she, I mean, we had to use part of the house for the daycare. Part of our groceries were to feed the kids that were there. You know, part of our utility bills. I mean, almost it just added up all over the place because our house was part of or I mean that was primary to the business. Since we were able to allocate, you know, a certain amount of depreciation on our house as a tax write off, that was cool. That was a non cash write off. That was money we didn't even have to spend spend to get a write off. But anyway, the thing is, this was quite a few years ago. That first year that we had a business running out of our house, it made almost a $3,000 difference in what we paid in taxes, which was huge. And that was excellent. I mean, I sat down to do my taxes and it was the first time I'd itemized. And that was fantastic having that big of a swing in our taxes. And I mean, you know, when it comes time for taxes, most people don't like talking about taxes. Personally, taxes are fine. I mean, our governments do a good job. They provide us with a reasonable society to live in. Actually a pretty good society to live in. Way better than, you know, back in the middle ages. So, you know, having the government around, that's okay and you know, paying for the services. But of course, nobody wants to pay more than they absolutely have to. So like you and me, I don't want to pay any more taxes than I absolutely have to. So of course I'll do the things that I need to do. And as far as running a business out of my house, that's something I'm going to do for the rest of my life. I recommend it to everybody that I talk to because when you have your own business, you get to do what you want to do. And this is one of the great things about trading. Not only is it a business that provides you freedom and doing something you enjoy, the payoffs are good. But it is a real business if you'll set it up like a business. Like I said, that's the key thing. Now if you want more information on how to set up your trading as a business, because most people who've only been employees and maybe that's you don't know how to set up a business. That's part of why I included a good portion of it in the subtle trap of trading is how do you do that? So I gave you a blueprint in the subtletrap of trading and you can swing by InsideOutTrading.com or you go straight to the site where I have the subtletrap of trading. It's subtletrap.com Like I said, just one of the many things that are covered in it is how to set up your trading as a business, how to treat your trading as a business. Because when you do it, there are, I mean, just advantages all over the place for you personally and financially and in your business. But also when you're trading, I mean, when you're trading, it is business. It has its advantages of its own. It gives you organization, it gives you structure and focus and lots of pluses. Tax write offs are great. Now if you're not making money as trading, you're sitting there thinking, well, the losses, I already have enough write offs. Well, the thing is investing in, like I said, educational materials for your trading business, that becomes a write off and it's better to have those kind of write offs, educational write offs rather than losses. So investing in yourself as the trader and the owner of your business, it's really, really worthwhile. Because wouldn't you rather be spending your money on how to become a better trader and how to run your trading business better than losses? Personally, I love being in a position where I'm looking for write offs because now I don't have business losses to write off. Now I've got business income that I need to cover with write offs and that's cool. Ideally, you want to be in the same position, you want to be looking for as many write offs as you can and needing to because you're making money. That's why I do what I do and that's why I wrote the subtle Travis to help you get yourself in that position. Anyway, Brian McAvoy with Inside Out Trading. On YouTube, I'm known as Trader Brian. Feel free to subscribe to my videos. Hope you have a great weekend. Cheers.