Cryptocurrency use is on the rise, making it the perfect time to add crypto tax prep to your services. Here are the basics of accounting for cryptocurrency that every tax pro needs to know.
In the United States, it's illegal to coin your own currency. So, why is cryptocurrency legal and will the government eventually ban this form of fiat?
The IRS has begun to focus its efforts on cryptocurrency users. Why is the government taking such a keen interest, and why now?
Cryptocurrency is more popular than ever before. As it becomes more mainstream, the IRS is taking notice, and it wants to make sure the government is getting the taxes it's owed.
For the first time since 2014, the IRS has issued crypto tax guidance for tax and accounting professionals.
Over the past few months, the IRS has been targeting crypto traders. Letters 6174-A, 6173, and CP2000 have been mailed to more than 10,000 individuals, and frantic cryptocurrency holders are unsure of the next move to make.
Millions of Americans have bought or sold cryptocurrencies, but few are aware that they have to pay taxes on their virtual currency investments. Even if you’re used to working with an accountant, here are four key reasons why you should think about filing your taxes with CryptoTaxPrep.com this tax season:
IRS Forms New Crypto Tax Enforcement Division
The internet is a breeding ground for rumors and popular myths. Around tax time, lots of tax-related misconceptions begin to circulate. This is particularly true in the cryptocurrency community since cryptocurrency taxes are a relatively new field that few people truly understand.
Cryptocurrency investors are a pretty forward-thinking group. After all, they are the figureheads of a ground-breaking new fintech revolution. You could imagine that such an enterprising group would be able to handle something that seems as simple as filing crypto taxes. However, may coin traders are facing the most challenging tax season of their lives.
If you’ve been following the news lately, you may be seeing some storm clouds on the horizon for crypto markets. Between the recent IRS lawsuit against Coinbase and any of the several SEC enforcement actions the agency has taken against ICOs, it looks like the crypto community should be gearing up for a challenging regulatory environment.
Some coin traders were riding high last year, making fortunes on a crypto market that saw Bitcoin prices skyrocket to over $18,000. However, now that tax season is here, a few investors are experiencing sticker shock on their tax bills.2017 is in the books at this point, and little can be done about tax liability incurred in the past. However, Happy Tax offers tax advice and planning services that can help you avoid costly mistakes in the future. Happy Tax employs the most skilled and experienced Certified Public Accountants (“CPA”) that have been specifically trained in the rules and regulations applies to cryptocurrency taxes.
Planning your tax liability is a lot like playing chess – it’s surprisingly complicated, and the experts are way better at it than the rest of us. Between tax reform and increasing IRS scrutiny over cryptocurrency exchanges and investors, 2018 is shaping up to be a challenging tax year. If you joined the cryptocurrency revolution recently, now is the time to start planning your tax exposure. If you don’t, you may be facing a tax bill that you aren’t prepared to pay.
After starting the year with a precipitous drop, cryptocurrency markets are starting to bounce back. This year, more and more virtual currency investors are looking at big returns on their crypto assets, and the crypto community is abuzz with exciting new opportunities. However, cryptocurrency income has been massively underreported to the Internal Revenue Service, and now the agency is applying more pressure than ever.
Between the IRS lawsuit against Coinbase and the tax reform that took place in the last few days of 2017, things are shaping up for a complicated tax year. There has been a lot of confusion within the cryptocurrency community regarding how, when, and in what amount they will have to pay taxes this year.
The IRS is missing millions of dollars in tax revenues from the profitable cryptocurrency markets, and it’s taking action to make sure the hemorrhaging stops. Earlier this week, the IRS issued a press release reminding everyone in the cryptocurrency community needs to pay their crypto income taxes.
Litecoin – long touted by its founder as “the silver to Bitcoin’s gold” – is among the most popular virtual currencies. It may be even more popular after a recent hard fork split the coin into two. The first fork on Litecoin’s blockchain, called “Litecoin Cash,” took place on February 18, and bullish coin buyers rushed to take advantage of the new investment opportunity.
The digital age is upon us, and cryptocurrency investors are welcoming the virtual currency revolution with open arms. For the most part, Bitcoin investors are a tech-savvy bunch. Many of them are used to using software and mobile apps for just about everything, from ordering takeout to filing our taxes.
Many cryptocurrency investors were caught off guard when the IRS started cracking down on unpaid virtual currency gains last year. Attracting the attention of the IRS auditing department is never a good idea, so make sure you start off this year with good tax planning.
When you borrow money, the IRS doesn’t treat it as taxable income in most cases. Unlike many things the IRS does, this makes total sense. After all, you don’t make any income when you take out a loan. Rather, since you have to pay it back, they simply charge income tax on the interest the lender gets from you over time. You get no deduction and incur no liability – refreshingly simple!
Miners are a critical part of the cryptocurrency ecosystem. New coins and bitcoin forks are being developed every day with the goal of making mining easier for both existing mining pools and new market participants alike. But now that more and more individuals and businesses are receiving mining income, how should this activity be reported to the IRS?
In August of last year, Bitcoin Cash forked from the Bitcoin blockchain. This process basically splits Bitcoin into two separate coins: Bitcoin (“BTC”) and Bitcoin Cash (“BCH”). When this occurred, everyone who held Bitcoin in a compatible wallet or exchange became entitled to claim an equivalent amount of Bitcoin Cash.
Independent confirmation of media reports has exposed a hard truth for the cryptocurrency investment community: coin traders owe the IRS big. Some coin traders were riding high last year, making fortunes on the bull crypto market. However, now that tax season is here, it’s time to pay the piper.
Federal and state laws require people to be licensed as money transmitters if they transmit funds from one person to another. Over the past few years, a number of individuals and businesses have been arrested and charged with financial crimes related to the unlicensed transmission of Bitcoin or other crypto coins. But does that mean you must register yourself as a money transmitter if you buy virtual currencies for friends or family?
Popular US-based cryptocurrency exchange Coinbase issued tax documents to many of its account holders over the past few weeks, stirring up confusion among many crypto investors. This confusion escalated to panic among some investors who saw unexpectedly large figures on the forms provided by the exchange.
Mark Zuckerberg posted a list of New Year’s resolutions earlier this month. He started off by highlighting his prior success at the three big ones – travel, exercise, and learning a new language. But Zuckerberg’s resolution for 2018 is different. He mentions plans to improve himself and his company in 2018 through decentralized technologies, including cryptocurrency.
At this point in the agency’s 155-year history, the Internal Revenue Service has seen every trick in the book investors use to avoid tax liability. In the past, crafty traders would try to generate a capital loss that existed on paper, but not in their actual portfolios. One such transaction is known as a “wash sale,” and it is prohibited by Section 1091 of the Internal Revenue Code. But does this prohibition apply to cryptocurrency traders as well?
The crypto community enjoyed a mostly unregulated early history. These days, however, are long gone. Some rumors still circulate about crafty investors who find ways to cheat the Man; but, despite our best intentions and wishful thinking, he catches up eventually.
Last week, the news broke that hackers had made off with $500 million worth of cryptocurrency from Coincheck, a popular Bitcoin exchange. This theft shattered the previous world record, a staggering $400 million in Bitcoin stolen from the Mt. Gox exchange in 2014.
Tax season is upon us, and many cryptocurrency investors are working hard to get their records in order. The IRS requires you to report every time you traded one crypto coin for another, cashed out your coin into traditional currency, or purchased goods or services with cryptocurrency. For investors with heavy trading volume, this can be quite a chore. Even if you made just a few trades per week throughout last year, your reportable transactions can really add up.
During tax season, emotions can run high. Many of us find ourselves stressed out and frustrated by all of the financial records and forms the IRS demands every year. When this happens, many of us turn to some of the trusted names in DIY tax preparation software.
The 2018 federal tax reform came with some hefty corporate tax cuts. As a result, there are lots of rumors circulating about being able to avoid tax liability by incorporating and managing their financial assets through a corporation or an LLC.
Did you do a lot of cryptocurrency trading in 2017? If so, you’re not alone! Lots of people made big returns day trading the thousands of new cryptocurrencies launched last year. However, now that tax season has rolled around, these big gains come with substantial reporting requirements.
For years, many of us have used software and mobile apps to help us manage our finances. However, even the most experienced self-preparers should think twice before going at it alone. This is especially true for people who are just now figuring out how to report their cryptocurrency investments to the Internal Revenue Service (“IRS”).
If the IRS demanded that we all pay capital gains tax on our Starbucks, there would be rioting in the streets. However, this exact scenario is one of the major taxation issues keeping Bitcoin out of mainstream retail payment systems.
The Internal Revenue Service (“IRS”) has been figuring out how it will deal with virtual currency investments since at least 2014. Tax policy regarding Bitcoin and other cryptocurrencies in the U.S. is now pretty clear, and the agency is coming after crypto investors who haven’t paid taxes on their holdings.
The Internal Revenue Service (“IRS”) established an official policy regarding cryptocurrency taxes back in 2014. However, most cryptocurrency investors are just now figuring out their tax obligations. Fortunately, there are several tools available to digital currency investors looking to prepare for the upcoming tax season.
The new year has arrived! For cryptocurrency investors, that means hope for another year of growth in virtual currency markets. Unfortunately, however, it also means we need to get ready to pay taxes on our cryptocurrency profits from 2017.
In our increasingly digital world, everything happens fast. Bitcoin was a groundbreaking financial technology because it sped up electronic transaction verifications from days to hours. Bitcoin Cash updated the original version to shave this time down to about ten minutes, and new coins like Ripple boast instantaneous transaction verification.
Cryptocurrency traders once enjoyed a relatively regulation-free investment environment. Back in the early days of Bitcoin, only the most tech-savvy investors even knew it existed. As cryptocurrency creeps further into the mainstream, however, regulatory agencies are developing increasingly sophisticated policies regarding digital currency.
Despite some initial uncertainty among the investment community, cryptocurrency investors have come to terms with the fact that they are subject to federal taxes. The Internal Revenue Service (“IRS”) requires people who use and invest cryptocurrencies like Bitcoin, Ether, Litecoin, and Ripple, to report sales and exchanges on their tax returns. But exactly when is IRS oversight triggered?
Bitcoin – the world’s first cryptocurrency – was invented in 2009, way back when the iPhone 3 was the hottest new tech toy on the block. However, just like the iPhone, Bitcoin needs an upgrade every so often. These upgrades (in theory) occur through hard forks in the Bitcoin blockchain. Hard forks create new versions of Bitcoin, like the increasingly popular Bitcoin Cash.
Millions of people invest in cryptocurrencies, to the tune of billions of dollars in trading volume worldwide. With the increasing legitimacy of Bitcoin and other cryptocurrencies, these assets are becoming more and more popular in the investment world. However, most people aren’t sure what virtual currencies are, how they work, or how they impact their tax liability.
Cryptocurrencies have been getting more and more popular as they creep from the fringes of the internet to the mainstream. In the past, regulators have struggled to figure out how to deal with this new financial technology. However, the Internal Revenue Service established an official cryptocurrency tax policy in 2014, and the agency has been refining its rules ever since.
If you have a Coinbase account, you’ve probably seen notifications pop up on your phone or computer gently reminding you to pay taxes on your cryptocurrency investments. You may be tempted to ignore these polite blurbs as yet another irrelevant piece of data in our overly-informed lives. However, unlike many of the things that flash across our screens, this is a critical warning that every cryptocurrency investor should heed.
Just a few years ago, Bitcoin and the myriad of alternative coins that followed were only known to tech-savvy professionals. Now, cryptocurrency is hot. So hot, in fact, that many financial professionals and government regulators are just now catching up. With more and more people using Bitcoin and other cryptocurrencies every day, there is a concerning lack of information available for those of us who want to get up-to-date on the hottest new technology in today’s financial markets.
Everyone who invests is gambling a little. Just like a poker player placing bets on good hands, investors assume risk by buying assets they believe are valuable. However, more and more of us are using cryptocurrency to bet on sports, events, and casino games online.
The digital age is upon us, and many of us now turn to software and apps to help us manage our finances. In this increasing DIY world, many people make the mistake of not consulting with a tax professional when setting up or managing their investments.
Bitcoin and the several other cryptocurrencies that followed are gaining real traction in the investment community. Much of this is due to astronomical returns investors have seen in a matter of mere months.
Throughout July and August, the Internal Revenue Service sent letters to more than 10,000 cryptocurrency traders to alert them that their crypto taxes could be incorrectly filed. Now, the IRS has sent out a batch of CP2000 notices to inform cryptocurrency holders that the information they received from virtual currency exchanges doesn't match their tax returns.