Taxes are the largest single expense most profitable options traders never fully account for. You can run a methodical premium-selling operation, hit your profit targets, and still come out behind your expectations if you have not planned for the tax treatment of your gains. Worse, the IRS rules around options have some counterintuitive wrinkles that trip up even experienced traders every year. This article covers the core tax treatment of options positions for US retail traders: how short and long-term gains work, the special 60/40 treatment for index options, wash sale rules, what records you actually need to keep, and the signs that you need to be talking to a CPA rather than relying on a tax prep software. ...