Profits are taxed in the U.S. as normal, according to your individual income bracket, even if you start an LLC for your day trading business since this is a "pass-through" entity (using Form 1040). Where things change slightly is if you elect to file as S-corp. Then, you pay yourself a reasonable salary and any other profits can be untaxed as dividends, or re-invested in to the business, or invested in tax-deferred retirement accounts. Just note that in this case you will have to pay payroll taxes and the bookkeeping is less trivial.