U.S. leading tax-filing software company now supports crypto, provides advice
While cryptocurrencies become more and more popular in the U.S., with a number of states already allowing filing of government taxes in crypto, most of certified public accountants (CPA) still don’t know how to properly file cryptocurrency on their clients’ annual tax returns. As a result, a lot of American taxpayers prefer not to disclose crypto assets, at all. Cryptocurrencies are classified as securities by both the Internal Revenue Service (IRS) and the Securities and Exchange Commission (SEC), and therefore not disclosing them might only get you in trouble. The major U.S. tax filing program, TurboTax, teamed up with Coinbase to make lives of American crypto holders easier.
Turbotax has proudly announced the new service in a press release. Now, instead of manually uploading every single crypto transaction, users would be able to upload up to 100 of them at once, using .csv files. The service is available to users of Turbotax Premier. Additionally to just putting crypto users at ease, Turbotax and its parent company, accounting giant Intuit, also educate their customers, as there are many bells and whistles that come into cryptocurrency tax filing.
For instance, not every single crypto transaction is taxable, as Turbotax points out. If you received your coins through a fork or an airdrop, you do not need to file it on your tax returns, same as when you received free coins – for example, as a gift. The underlying reason is simple – none of these events lead to transferring or exchanging crypto to fiat and therefore cannot be used to buy goods and services (at least, by the IRS definition). Additionally, if you bought cryptocurrencies, but haven’t sold them, you don’t need to report it either, as long as their total combined value is less than $15,000 per recipient. If you bought crypto with your solo retirement account – 401(k) or IRA – you do not need to record that income, too.
U.S. federal tax filing deadline for 2018 is on April 15, 2019. Check out more of our tax saving tips and techniques for crypto users here.