The growing popularity of cryptocurrencies has undoubtedly shaken up the global financial system, with governments around the world wrestling in a variety of ways with the economic ramifications. One of the most important and obvious topics on the agenda is taxation, since states are inclined to collect what they believe they’re owed on earnings made in the cryptosphere. In recent years, a slew of regulations have either been glancingly touted or come into force, in many cases generating puzzlement rather than comfort. However, although not every government has finalized a coherent position on cryptocurrency tax, the advice from experts is to diligently maintain records on gains made and losses incurred from trading activity.
Even if the tax authorities in your country are not yet crystal-clear on the nature of your responsibilities, imagine being asked – next year or the year after – to account for profits earned from trading digital tokens in the recent past. Can you casually produce your accounts, proving that tax has been calculated on your trading activity? Or, having relied on a combustible mixture of ignorance and arrogance, will you be left to splutter a half-baked excuse?
Familiarizing yourself with crypto accounting best practices and procedures is no longer an option – it’s a prerequisite. You don’t have to be a certified CPA to grapple with the subject matter either. All you have to do is regularly maintain your accounts, assets and information in preparation for filing an annual tax return. Doing so will keep the authorities off your back and confer peace of mind throughout the year. With the aid of the following guide, managing your cryptocurrency taxes will be a breeze.
DIY, CPA or Virtual Crypto Tax Tool?
Well-organized autodidacts who quickly process information and have enough time on their hands to brush up on the necessary regulations and filing procedures may wish to handle their tax affairs independently. They deserve plenty of credit, because it can be a substantial undertaking if there are numer...
