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.
Get your Crypto Taxes done by professionals in the industry.
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