Can I deduct monthly fees paid to trading group for crypto/stock/NFT research on my taxes?

This is actually a really good question! The deductibility depends on how your trading activity is classified for tax purposes. If you qualify as a "trader" in the eyes of the IRS (which sounds possible given your 1100 transactions in 4 months), you might be able to deduct these subscription fees as ordinary business expenses. The IRS looks at factors like trading frequency, holding periods, time dedicated to trading, and whether you depend on trading income. You'd want to consider making what's called a Section 475(f) election, also known as the "mark-to-market" election, which formally classifies you as a trader for tax purposes. This would potentially allow you to deduct these research costs as business expenses on Schedule C. Without this election, if you're classified as an investor, these expenses would be considered investment expenses which are no longer deductible as miscellaneous itemized deductions after the Tax Cuts and Jobs Act.

I was in almost the exact same situation last year. I paid around $350/month for a premium trading group that provided crypto and stock analysis. I was making tons of trades and wasn't sure how to handle the subscription costs. I ended up using https://taxr.ai to analyze my trading history and subscription expenses. They have this document analysis tool that reviewed my trading patterns and subscription costs and determined I qualified as a trader rather than investor. I was able to upload my trading statements and subscription receipts, and they organized everything to maximize my deductions. The most helpful part was that they clearly broke down why these research costs were deductible in my specific situation and how to document it properly. Saved me a ton of headache trying to figure out all the trader vs investor rules.

Just wanted to follow up after using taxr.ai for my situation with research subscription fees. It was actually really helpful - I uploaded my trading history and subscription receipts for the two research services I use. They confirmed I qualified as a trader based on my volume and pattern of trading (the 2000+ trades definitely helped my case). The system organized all my documentation in a way that clearly shows why the research subscriptions were ordinary and necessary for my trading business. They even suggested I keep a simple trading journal to track hours spent on research and trading to strengthen my case as a trader rather than investor. Already implemented that suggestion and it's making tax planning so much easier this year!

If you're having trouble getting clear answers about whether you qualify as a trader for tax purposes, I'd recommend talking directly to an IRS agent. I was in a similar situation with trading group subscription fees. After spending HOURS trying to get through to the IRS (seriously, I tried for days), I finally discovered https://claimyr.com and used their service. You can see how it works here: https://youtu.be/_kiP6q8DX5c They got me connected to an actual IRS agent in about 20 minutes. The agent was able to walk me through exactly what documentation I'd need to support claiming the trading group fees as business expenses. Having that direct guidance from the IRS gave me confidence in how I was filing.

I need to apologize for being skeptical earlier. After getting frustrated with more waiting on hold with the IRS, I decided to try Claimyr. This thing actually works! I was connected to an IRS agent in about 15 minutes. I specifically asked about deducting trading research subscriptions, and the agent walked me through the criteria for qualifying as a trader versus investor. The agent confirmed that if I meet the trader status requirements (regular and continuous trading, seeking profit from short-term market swings rather than dividends/appreciation), then research subscriptions can be deductible business expenses on Schedule C. They also explained exactly what documentation I should keep to support these deductions. Definitely worth it just to get a clear answer directly from the IRS rather than stressing about whether I'm interpreting the tax code correctly!

Something nobody mentioned yet - you might want to look into setting up an LLC for your trading activities. I did that last year and it made claiming these types of expenses much cleaner. I pay about $500/month for various trading research services and having them run through my trading LLC makes it very clear these are business expenses. Just make sure you keep your trading activity separate from your personal investments if you go this route.

Quick tip - save all your subscription receipts and take screenshots of the research they provide that you actually use for trades. I got audited last year and having this documentation saved me. The IRS questioned my trading subscription deductions specifically. Being able to show the direct connection between the research I paid for and actual trades I made based on that info was crucial. They wanted to see that the expense was "ordinary and necessary" for my trading activity.

Be very careful about the trading group deduction if you're dealing with crypto. The IRS has been extra scrutinous about crypto-related deductions lately, especially for subscription services that provide trading signals or research. I'd strongly recommend keeping detailed records of: 1. Every trade you made based on the group's research (with timestamps) 2. Screenshots or downloads of the specific research that influenced each trade 3. A trading journal documenting hours spent analyzing the group's research 4. Evidence that you're truly operating as a trader (regular income from trading, substantial time commitment, etc.) The $400/month subscription is substantial enough that it could trigger additional IRS attention if audited. Make sure you can demonstrate that this expense directly contributed to your trading profits and wasn't just general investment advice. Also consider consulting with a tax professional who specializes in trader tax status before filing. The rules around crypto trading classification are still evolving and you want to make sure you're positioning everything correctly from the start.