Doing your taxes is often a nightmare, and it’s even harder when you own cryptocurrencies.
Due to somewhat confusing and obfuscated rules around cryptocurrencies as assets and holdings, the IRS requires cryptocurrency owners to track the cost basis and other metrics when reporting capital gains from cryptocurrency holdings.
Now a company called CryptoTrader.tax is offering an innovative product to plug into TurboTax to take care of some of these administrative headaches.
A press release yesterday shows the Missouri-based software company is poised to integrate with Intuit’s TurboTax offering.
“The IRS treats cryptocurrency as property for tax purposes,” explains a press release from the company yesterday. “This means you are required to report your capital gains and losses from your crypto trades on your taxes. To properly report these transactions, you need to report the original cost basis, the fair market value in USD of the coin at the time of the trade, and the amount of gain or loss you incurred for every cryptocurrency transaction. This becomes nearly impossible to do by hand as the historical USD price for all coins is not readily available. CryptoTrader.Tax automates this entire process.”
Officials claim that CryptoTrader.tax has tens of thousands of users currently, and they expect this number to grow in the future.
CryptoTrader.tax users can calculate cost history based on past coin values, import historical data and exchange information and just as importantly, export tax forms for preparers.
TurboTax made a name for making taxes easy – and with this new addition, it will probably gain that same reputation among coin holders.
“You simply import your cryptocurrency trades into the platform using the technology we have built. The software will automatically crunch your capital gains and losses numbers and generate the necessary tax documents including the IRS form 8949,” David Kemmerer, Co-founder of CryptoTrader.Tax, said in a press statement. “CryptoTrader.Tax makes it extremely easy to calculate your crypto tax liability and save time doing your taxes.”
Bringing cryptocurrency capability to tax preparation is a big way to anticipate some of the big changes going on this year.
As of late, we’ve reported on new blockchain IoT innovations, progress at the U.S. Securities and Exchange Commission, and buoyant remarks from entrepreneurs like Jack Dorsey who believe that crypto is a technology whose time has come.
Traders can utilize tools like CryptoTrader.tax to make managing their portfolios easier, and look ahead to larger scale adoption and how that might impact cryptocurrency markets.