What an FX trader can claim as expenses and what cannot. How to include computers and smartphones as expenses.

I lost money in FX.
I bought several tools.
VPS and book costs also incurred.

Still, do you think, “I won’t declare because I’m not making a profit yet”?

Actually,you may be in a tax-dutile state simply because you haven’t properly identified what can be counted as expenses.

This article organizes “things that could be expenses” and “things that are difficult.”

✅ Possible Expenses (With Conditions)

Expenses necessary to earn income from FX can be deducted from profits as business expenses. However, it is important that they can be explained as related to trading.

■ FX Tools and Software

• EA
• Indicators
• Verification software
• FX practice tools

If directly used for investment decisions and verification, they are generally recognized as necessary expenses.

■ VPS/Server Fees

If the costs are for running MT4/MT5, the relevance is clear.

■ Books and Paid Information

• Investment-related books
• Economics newspapers
• Paid investment newsletters

They can be deductible only if directly used for FX analysis and decision-making.

■ Seminar Fees

Related to FX or investments, and the content must be clearly linked to trading.

■ Computer and Monitor

If used exclusively for trading, they can be fully deductible.

However, if there is private use, the basic rule is proportional allocation.

Example：

• Trading use 50%
• Private use 50%

As shown,if you can justify a reasonable ratio, you may treat part of it as an expense.

■ Smartphone and Communications Costs

It is often difficult to expense them in full, but

• Market checks
• Order management
• Viewing economic news

and other clearly trading-related uses,

it is common in practice to allocate around 50% or other reasonable ratios.

What matters is whether you can explain it.

❌ Expenses that are hard to classify

■ Pure living expenses

• Rent
• Utilities
• Food
• Entertainment expenses

Without business activity, difficult to treat as expenses.

■ Products with weak connection to investing

“Seems somewhat educational” is not enough.

? The biggest point: Can you explain it during a tax audit

The most important part of expenses is,being able to explain them in your own words in a rational way when asked by the tax office.

For example,

• Put 100% of a computer as an expense → high risk of denial if there is personal use
• Allocate around 80% → there is personal use, but the main purpose is trading and easy to explain

By keeping a “slightly generous” percentage like this, a practical explanation becomes possible.

Smartphones and smartwatches used for notifications are the same.

• Why 50%?
• What uses are you applying it to?

It is important to prepare to answer these questions with reasonable grounds.

In extreme terms, whether something can be an expense depends on whether you can theoretically justify it. Of course, completely irrelevant expenditures or deliberate deception are out of the question. In those cases, additional taxes may be imposed.

However, as long as you judge reasonably and handle it honestly, even if part is denied, it is usually not considered to indicate malice.

? The key is “relevance” and “rationality”

In taxation,

• Is it directly related to the transaction?
• Are the amounts and ratios reasonable?

is important.

Rather than insisting on full amounts,it is more realistic to allocate proportionally within verifiable limits.

• Tools and VPS are relatively easy to justify
• PCs, smartphones, and communications costs are realistically allocated by proportion
• Rather than full accounting, focus on a justifiable ratio
• Ultimately, whether you can explain it during a tax audit is the standard

Expense processing is more about maintaining consistency than aggressively maximizing deductions.

Don’t think, “It doesn’t matter since I’ll probably lose anyway.”
First, organize the expenditures and put them in an explainable form.

※This article provides general guidance. Actual decisions depend on income situation and transaction realities. For final handling, please consult a tax accountant or the tax office.