Funded Trader Tax Questions

• What tax forms do I need to complete?
• Will I be considered an employee of Topstep?
• How should I report my earnings from Topstep?
• Can I open a Funded Account under a business or company?
• What forms will I receive at the end of the year?
• How should I report my earnings to a country besides the US?

What tax forms do I need to complete?

• If you have US citizenship, you must fill out a W9. This is true even if you do not currently live in the US. Additionally, if you are a resident alien of the US, you must fill out a W9 regardless of your citizenship.
• If you do not have US citizenship and are living outside of the US, you must fill out a W-8 BEN.

Will I be considered an employee of Topstep®?

• All traders are considered independent contractors, not employees.

How should I report my earnings from Topstep®?

• Funded traders should report all earnings as regular income. Additionally, funded traders are only required to report the amount they have received as payouts.
  • For example, a funded trader that earns $5,000 in their account but only requests a $1,000 payout, then they would have to report $1,000 worth of income.

Can I open a Funded Account® under a business or company?

• Traders can only set up a Funded Account® under a US-based single-person LLC. Topstep® cannot set up a Funded Account® under a C-corp, S-corp, or multiple-member LLC. If a trader wishes to set up a Funded Account® using an eligible business, they still must use their personal information on the Funded Account® Agreement. They can then enter their business information on the tax form. Traders that choose to go this route can take their payouts through the business.

What forms will I receive at the end of the year?

• Traders that receive over $600 worth of payouts in a calendar year and have US citizenship will receive a 1099-NEC. during the following year. The amount of funds the trader received will be recorded on the 1099-NEC form as nonemployee compensation. We do not have to provide a 1099 form to anyone making less than $600 during a calendar year.
• Traders without US citizenship will not receive a 1099 form from Topstep®. The 1099-NEC is only applicable for US/IRS reporting purposes and not for foreign reporting purposes. Topstep® is not obligated to provide any documents for reporting taxes to foreign governments.

How should I report my earnings to a country besides the US?

• Topstep® is unable to provide guidance regarding foreign tax reporting. We advise traders to report any earnings in accordance with their country’s local tax laws. We would also recommend that traders consult a tax or legal professional if they have any specific questions regarding their country’s tax standards.