Crypto Taxes
More than 10 percent of Americans traded crypto in the last year — if you’re one of them, you’re probably wondering how your trades and other crypto activity will impact your taxes.
U.S. taxpayers are now required to report crypto sales, conversions, payments, and income to the IRS and state tax authorities. Moreover, each of these transactions has different tax implications.
To determine if you owe taxes, look at how you used your crypto in the last year. Transactions that result in a tax are called taxable events. Those that don’t are called non-taxable events.
Here are a few examples of taxable events:
- Getting paid in crypto;
- Getting crypto in exchange for goods or services: If you accept crypto in payment for a good or service, you’re responsible for reporting it as income to the IRS;
- Mining crypto: If you mined crypto, you’d likely owe taxes on your earnings based on the fair market value (often the price) of the mined coins at the time they were received. Crypto mining as a business is taxed as self-employment income.
If you’re just holding crypto, good news — there is no immediate gain or loss, so the crypto is not taxed.
This is just a quick summary of a few of the key points to be aware of regarding crypto, but please let us know if you have specific questions before we prepare your return this year, and we will provide further advice.
How To Prepare For Crypto Taxes
If you’re just holding Crypto, good news — there is no immediate gain or loss, so the Crypto is not taxed. However, if you have done transactions using Crypto, you are required to pay taxes on each transaction by law.
If you’re someone who has to pay taxes on Crypto, then I have some good news for you. We have an exciting tool you can use to help track your crypto sales, conversions, payments, and income. This tool is called Ledgible.
What is Ledgible?
Ledgible is a crypto tax reporting software that tracks every crypto transaction you do by connecting your wallets, exchanges, and more.
This software can calculate your crypto tax burden, provide current year planning, and prepare reports that summarize your crypto activity. In short, this software will make your life as a crypto investor so much easier.
You won’t have to worry about overpaying in taxes. You don’t have to freak out because you did a million transactions last year and don’t even know where to start…
Best of all, all you have to do to take advantage of these features is create an account. Once you create an account with Ledgible, our team at KDA will take responsibility for managing your account for you.
This means you don’t have to worry about navigating the software, learning how it works, trying to interpret what the reports mean. Instead, leave all the work to us, and we will make sure you pay the least tax possible while also keeping you out of trouble with the IRS.
If you’re a crypto investor, I highly encourage you to sign up ASAP. We are in the middle of tax season. This software will ensure that you don’t run into any hiccups and leave an extra tip for uncle Sam.
If you want to learn more about this service, click the link below.
This is just a quick summary of a few of the key points to be aware of regarding Crypto, but please let us know if you have specific questions before we prepare your return this year, and we will provide further advice.
If you’re ready to sign up for leadable now and start saving on taxes, click the link below to sign up now.
START TODAY
Get your Crypto Taxes done by professionals in the industry.
From Our Blog
8 Retirement Moves You’re Most Likely to Regret
Quitting work too soon. One-third of all retirees will live to be over 91 years of age. Avoid the mistake of rushing to retire as soon as possible. Working until age 66 instead of 62 will increase your social security benefits by 25 percent. You can expect social security payments 75 percent higher if you wait until you’re 70 years old. Overestimating investment returns. Stock market returns can be depressed for 10 years or more. Just because the average return is 7.0 percent after adjusting for inflation doesn’t mean it’s seven percent every year. Be realistic in your assumptions about future returns.
Filing for Bankruptcy as a Retiree
Calculate what your income is. Your income will determine if you qualify for Chapter 7 or Chapter 13 bankruptcy. Income qualifications vary from one state to another, however, so it’s important to check the requirements for your state. Ensure your debts will be erased if you file for bankruptcy. Debts can be secured or unsecured, and some types of secured debts won’t go away when you file. What is Chapter 7 bankruptcy? Chapter 7 erases any unsecured debt, which includes medical bills as well as credit card debt. Your income has to be below a certain level for you to qualify for this type of bankruptcy and this level varies from one state to another. The downside of filing for Chapter 7 is that your assets will be sold to pay your creditors back. Your creditors will not be paid back if there are no assets to sell. What is Chapter 13 bankruptcy? Chapter 13 bankruptcy includes setting up a restructuration plan, usually with monthly payments. Filing for this type of bankruptcy means that you’ll have pay at least a portion of your debt. The main advantage of Chapter 13 is that your assets won’t be sold. However, you’ll have to prove that your income allows you to keep up with the repayment plan after subtracting your living expenses. Your secured debts also have to be below a certain level in order to qualify for Chapter 13. What kind of assets could you lose if you file under Chapter 7?
Things to Consider Before Lending Money to Family and Friends
Should you loan money to friend or family member? It’s […]
Top 10 Financial Challenges for Millennials
A lack of preparation for financial emergencies. Everyone needs an emergency fund. While the lack of an emergency fund is common within every age group, millennials are especially likely to not have any money set aside for emergencies. Strive to set aside 3-6 months of living expenses and you’ll be prepared for most financial emergencies. Failing to take advantage of 401(k) matching. If your employer offers 401(k) matching, take advantage of it. Not only will your money work for you, but your employer is giving you the same amount as what you’re investing. Considering future growth, your employer could be handing you a fortune – for free!
Think Like a CFO in Your Personal Finances and Enjoy a Brighter Future
Many people handle money well at work, but horribly at home. There’s a different mindset when you’re expected to act like a professional. What if you handled your personal finances with the same professionalism a CFO takes care of business? Discipline and professionalism can add a lot to your personal financial future. Just because no one is watching you doesn’t mean you can be irresponsible with your finances at home. Act like a CFO and take control of your money: 1. Live by your budget. Even the wealthiest companies have budgets that each department and manager are expected to follow. As your own personal CFO, you should prepare a monthly budget and chart any discrepancies. Then make the necessary budget adjustments. • If you don’t have a budget, creating one is the first order of business.
