I have come to know how to do all of this. It’s confusing.... So feel free to ask away.
Step 1. You have to qualify for trader tax status. 4 trades a day. 4 days a week average.
Step 2: all expenses get put on schedule c. The obvious is computers, desks. But lots of others; internet, etc and the big one that is very confusing is the home office.
Step 3: get the grand total of expenses from schedule c. Report this number as a negative number on the 1099 income. Meaning create a new line item for short term gains as a negative number (aka a loss) to round off expenses from schedule c. Do the same for home office expenses. Meaning there should be two negative short term gains/losses reported on the capital gains worksheet to ‘even’ out the expenses. If that makes sense . It helps to make notes of this if you are sending in your tax return to explain it. But that is not necessary.
LLC. I have an llc account and a personal account. The llc marked under marked to market provides tax loss insurance for there is no 3k limitation. And loses can be carried over to future years gains. Also, by paying yourself a salary through the llc, you can write off health insurance premiums and solo 401k contributions at the end of the year. This provides more tax relief but their Ian higher costs maintaining the llc (formation/state fees).
