The next tax season will inevitably approach, and those of you who took a chance on cryptocurrency may be wondering: Do I have to pay tax on my digital investments? Sorry, but yes you do.
Although tax laws are constantly changing, especially in the wild west of cryptocurrency, fear not. Token Tax is the one tool to rule them all, and can help you report cryptocurrency taxes.
In this past year, cryptocurrency investment has skyrocketed. The total market cap rose over 1000 percent, even breaking a record and climbing over $600 billion in December.
Coinbase, the most popular online platform for buying and selling digital currency, gained one million users in one month alone.
Cyrptocurrency’s increasing popularity led to changes in IRS rules.
Although cryptocurrency investors were previously able to use the “like-kind” tax code exemption, the IRS now says digital investments must be taxed as short and long-term capital gains.
Back in 2015, only 802 Americans reported Bitcoin related gains and losses. At the time, cryptocurrency could technically be categorized a property instead of income. The 2017-18 year should show a greater increase in reports due to the new IRS regulations.
It can be difficult to determine how to report your taxes, and many other available tools victimize you with information overload. Understanding your tax liability is no fun at all, but it’s not something you’d want to get wrong unless tax jail sounds exciting.
The newly minted Token Tax does the work for you, integrating directly with Coinbase’s API to import all your investments in an easy to read format that’s directly exportable to the IRS. Kraken, Bittrex, and GDAX are also securely integrated with the platform.
Using FIFO, Token Tax calculates your tax liability and displays it in an easy to read interface. You can then export a fill-out 8949 form directly to your accountant or the IRS for review.
Creators Alex Miles and David Holland Lee say they believe Token tax “could be the TurboTax for crypto.”
Even though Token Tax is still in test mode, not even beta, it caught our attention by winning first place overall in Product Hunt’s Global Hackathon.
If you have invested in cryptocurrency and want to get ahead of the curve for tax season, check out their demo and see for yourself.
This story was first featured here in January of 2018.
Lindsay is an editor for The American Genius with a Communication Studies degree and English minor from Southwestern University. Lindsay is interested in social interactions across and through various media, particularly television, and will gladly hyper-analyze cartoons and comics with anyone, cats included.
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