Important Things You Should Know Regarding Cryptocurrency Tax

Let’s focus on taxes.

Although it’s early in 2020, before you know it, April 15th is about to come around. It is best to organize things now and get ready to file in case you find incomplete forms or other possible hindrances.

Don’t hurry to compile all of your tax information this year just to file your return in hurried panic. Know what you can do now and prepare to make tax day a breeze.

Prepare for 2020 Tax Return Now

If you own any crypto-currency, taxes can get really tricky. And this year, the IRS will be really trying to see if crypto investors are filing their investments properly. And how does that get taxed in the world? What are you supposed to fill out upon return? What if you are doing the wrong thing? Do you even have to pay crypto-currency taxes?

There are a few things you should keep in mind before you fill out your IRS 8949 form to record your cryptocurrency gains and losses. Each year the tax rules change, and 2020 is no exception. Prepare for the taxes this year and read up on what you need to learn about cryptocurrencies in particular.

We’re not going to go over every single nitty-gritty detail about filling out your cryptocurrency, but if you have any questions that we don’t end up answering, the IRS website has a great FAQ page dedicated to filing cryptocurrency queries.

Before filing your Cryptocurrency tax return, here are things that are helpful to understand:

Understand the IRS Guidelines on Taxable Activities

Of course you don’t want to be taxed on something that isn’t really taxed on. It is therefore important to understand what is called a taxable operation.

When it comes to cryptocurrencies, you can be charged on cryptocurrency exchange to fiat-trading crypto to crypto-pay for goods and services with crypto-earning cryptocurrency like mining, airdrops and hard forks.

Harvest Your Bitcoin Losses

And, the bad news this year is, you might have had some setbacks.

The good news is; the crypto-losses are not paid. So be sure to keep track of your expenses, because when you file your taxes this year, you will have to record them on the IRS 8949 form. Recording your cryptocurrency losses will reduce your tax liability which means when the time comes you won’t have to pay the same amount in taxes.

During the summer of 2019 and December, cryptocurrency suffered a tragic setback. If you have had a bad loss with your investment in cryptocurrencies, the best thing you can do is recover your losses.

Don’t Stress

It can be a challenging task to fill your taxes, particularly when you have cryptocurrency to file. If it’s all getting too daunting, don’t be afraid to help you out with an organization or crypto-currency tax software. Just take it up little by little and you’re going to be good to go and file your taxes properly, before you know it. Just don’t wait to file them until the very last minute; we know how that’s gone in the last few years and it’s not perfect.

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