1) Evaluating your tax obligations as a funded trader: Understanding the tax implications of receiving a profit split as an independent contractor in a trading evaluation program in the U.S. and the reporting requirements for your business income/expenses. Make sure to file the appropriate forms and consider making quarterly estimated tax payments to avoid penalties.

2) Different tax pathways in the U.S.: Exploring the tax reporting paths for independent contractors (1099-NEC + Schedule C + Schedule SE), partners/members (Schedule K-1), and employees (W-2) in trading evaluation programs. Understand the deductions and taxes associated with each scenario.

3) Section 1256 and funded traders: Clarifying the application of Section 1256 rules to certain listed futures and options contracts held in your account versus prop payouts received as an independent contractor. Ensure you report income correctly based on the type of contracts or payouts.

4) Tax considerations for non-U.S. traders working with U.S. firms: Understanding sourcing and withholding rules for foreign individuals working with U.S. trading evaluators. Familiarize yourself with IRS regulations and forms related to compensation for personal services.

5) Tax overview for U.K. traders: Determining whether your trading activity qualifies as a trade for tax purposes and reporting requirements under Self Assessment in the U.K. Learn about allowable expenses and record-keeping obligations.

6) Deductible expenses for traders: Identifying deductible expenses for U.S. and U.K. traders, including evaluation fees, platform costs, and education expenses. Keep detailed records and receipts to support your claims.

7) Tax calendars, forms, and record-keeping: Establishing a system for managing estimated taxes, year-end reporting, and record-keeping to avoid tax pitfalls. Stay organized and compliant with IRS and HMRC requirements.

8) Advertising guidelines for traders: Adhering to CFTC Regulation 4.41 when publishing hypothetical or simulated trading results. Ensure you provide appropriate disclaimers for any performance data shared.

9) Common tax pitfalls to avoid: Preventing errors related to Section 1256 treatment, SE tax obligations, nonresident sourcing issues, and U.K. allowance discrepancies. Stay informed and seek professional advice if needed.

10) Quick checklists for U.S. and U.K. traders: Summarizing key steps for reporting taxes as a funded trader in the U.S. (1099-NEC path) and the U.K. (Self Assessment path). Follow these checklists to streamline your tax preparation process and maintain compliance.

Read more at Barchart: What Every Prop Trader Needs to Know