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.
If you bought or sold cryptocurrencies in 2017, consider working with a tax professional this year. Depending on your investment activity, you may not even be able to use the tax preparation software that you’ve relied on in the past. If you don’t have a regular tax preparer, or if you aren’t sure your accountant is up-to-date on all of the new rules impacting cryptocurrency investors, contact Happy Tax today. The cryptocurrency-trained Certified Public Accountants at Happy Tax have all the tax advice and planning services you need to file your returns properly this year.
High-Volume Cryptocurrency Traders Face Huge Reporting Obligations
Cryptocurrency markets have increased investment opportunities across the world. Virtual currency exchanges signed up millions of new users in 2017, many of whom invested just a few hundred dollars to see what all the fuss was about. However, cryptocurrency became an increasingly mainstream investment last year, and more and more people started trading at high volumes. By the end of the year, some of the more active cryptocurrency investors had made thousands of trades.
Now that 2017 has come to a close, many high-volume cryptocurrency investors are facing the daunting task of reporting all of their trades on their tax return. The IRS requires investors to submit records showing every time they sold or spent their virtual currency assets. For daily traders, this can add up quickly.
Popular Tax Software Fails to Meet Crypto Investor’s Needs
As the cryptocurrency investment community gets ready for tax season, some high-volume investors are finding they are no longer able to self-prepare. This is because many of the existing tax preparation software limits the number of transactions you can report in a given year. For example, TurboTax Online can only accept up to 500 transactions per account, and the company warns that online performance is likely to go down as more information is uploaded. The desktop edition can handle more – up to 2000 trades – but for some of the most active cryptocurrency traders, this just doesn’t cut it.
It’s not too far-fetched to believe that someone with the financial sophistication to day trade cryptocurrencies would be able to self-prepare their taxes. However, not consulting with a tax professional this year would be a mistake. The tax laws are changing, and the IRS is bearing down on the crypto community. As a result, cryptocurrency investors need good tax advice now more than ever.
Happy Tax offers the highest-quality tax advice and planning services specifically focused on the needs of cryptocurrency investors. Happy Tax only employs the most skilled and experienced Certified Public Accountants to work through your tax returns, ensuring that you are reporting everything required by the IRS this year.