People who do a lot of short-term trading may qualify as traders under the tax law. If you meet the relevant tests, you'll receive somewhat different — and more favorable — tax treatment.

A Day Trader reports his expenses on Schedule C and trading gains and losses on Schedule D

Day Traders can claim a home-office deduction because they are carrying on a business.

A trader can deduct all margin interest on Schedule C, while Investors deduct their margin interest on Schedule A, providing it doesn't exceed their investment income.

Gains are NOT subject to self-Employment Tax.  Traders are subject to the $3000 annual limit on losses that exceed gains.

To be considered a Trader, according to IRS, your trading has to be frequent and substantial.

For more information on Taxes and Day Traders, visit the IRS web site at www.irs.gov and put "day trader" in the search box.  If you find the IRS site too legal, try:  http://www.traderstatus.com/ or http://www.fairmark.com/traders/irsguide.htm  for more information