Taxes

[mszmoney]

One thing came to mind when i opened a live account....I noticed that the majority of brokers are stationed overseas. This made me think of taxes. I mean i'm proud to be an American and all but it'd be nice not to you know...pay them. my main question is, do i have to pay taxes when i have an international broker stationed outside the US? Being 18, I'm still learning. What are your insights? thanks

[alan]

One thing came to mind when i opened a live account....I noticed that the majority of brokers are stationed overseas. This made me think of taxes. I mean i'm proud to be an American and all but it'd be nice not to you know...pay them. my main question is, do i have to pay taxes when i have an international broker stationed outside the US? Being 18, I'm still learning. What are your insights? thanks

Yes of course. US Citizens have to pay taxes on WORLDWIDE income. So it is your responsibility to report any money you make regardless if the broker happens to be located offshore. Now, whether you carry out that responsibility is up to you. I suggest consulting with a tax expert on this matter.

[liggy002]

Yeah, but the trouble is you won't actually know if you are making that money unless the broker allows you to withdraw it.

[alan]

Yeah, but the trouble is you won't actually know if you are making that money unless the broker allows you to withdraw it.

True. Any profit you may have is PAPER profit until you have cold hard cash in your hands or bank account. If the broker doesn't allow you to withdraw, you know you're dealing with a sham so called "broker" Report them to the proper authorities and threaten legal action if need be. The main thing is to not get into that situation in the first place. Do extensive research on a broker before you give them your money. Try to stick with reputable brokers in respectable jurisdictions and make sure the broker is REGULATED by some third party agency - don't just trust their "better angel" in them to regulate themselves.

Also try to do a withdraw to test them out. Unfortunately what often happens with crappy brokers is that they'll let you withdraw small amounts but when it comes to that big one they will come up with a million excuses to keep your money. If it ever comes to that you need to take strong action.

If every you come across such a garbage broker make sure you let me know and others. I for one would gladly give you space on all the web properties related to forex so we can expose such a broker. In the end grassroots consumer boycotts are our best tools in this wild wild west that is the retail forex market.

Best of luck to you.

[ordiehl]

If you earn money trading Forex, it is taxable; period. However if your question is: How will they ever know? That's totally different. An overseas broker probably never asks for your social security number. However, the IRS can do what's called a proof of cash. This is where you have to justify each deposit in your bank accounts. This is rare and is only done with high income audits.

[alan]

Ouch..I'd hate to go through one of those...Still it would be best to avoid any potential problems and just pay "the man" his taxes..

[mystikdragon7]

Ouch..I'd hate to go through one of those...Still it would be best to avoid any potential problems and just pay "the man" his taxes..

Yes that would suck to have that happen. But trying to run from the tax man will almost surely lead to coming back around and biting you in the ass. Even when you win at the lotto or winning big at the casino you should always have them take the taxes out right then and there.

[alan]

This may be an appropriate time to brag that here in Canada we don't pay taxes on lotto winnings...:D....not that it matters that much to me as I don't play the lotto...

[mystikdragon7]

This may be an appropriate time to brag that here in Canada we don't pay taxes on lotto winnings...:D....not that it matters that much to me as I don't play the lotto...

Want to send me some lotto tickets:D:D?

[alan]

lool..suuure..but I get 25% of your winnings ;) haha

btw, doesn't the government take like a third of your winnings there in the States?

[mystikdragon7]

lool..suuure..but I get 25% of your winnings ;) haha

btw, doesn't the government take like a third of your winnings there in the States?

20% and you got yourself a deal!!:D:D

Actually it varies state by state on how much you get taxed on your lotto winnings. All things like your tax bracket state and even your city can tax you. So it is possible to have more than 50% of your winnings taxed. Talk about ridiculous, I think my state takes almost 50% lol. So you win 1 million and you get about 625k.

[alan]

Wow, that sucks. So nice to see that America is or is turning into a super socialist state. Pretty soon we'll be taxed on the air we breathe or the flatulence we produce..lol...pollution tax ;)..

But then again I should'nt be one to judge much as Canadians are heavily taxed too..more so than US Citizens I believe.