A formal regulation by the Internal Revenue Service categorizes cryptocurrencies as property but not a regular virtual currency. Nowadays, it has become imperative to account for every crypto transaction that takes place to avoid the implications of non-compliance.
However, the filing exercise can be a hectic procedure for dedicated investors who frequently engage with crypto trading. It further means that investors will have no option but to dig for their past crypto trading activities and compile a comprehensive tax report.
Accointing.com gives you a useful tool to monitor and manage your crypto transactions to avoid the hassles of filing massive returns. The tax platform comes in handy when calculating an investor's transactions from all the wallets and exchanges he/she used at one point.
Taxable Situations in the Crypto Space
Determining the taxable products is the first step towards wrapping our heads around the crypto taxing procedures. Taxable events are described as the activities that initiate an investor's earnings.
Those activities alone play a significant role when coming up with a tax report. Taxable situations include:
Crypto Income Earners
Usually, miners and stakers mainly act as transaction validators in an ecosystem. In return for performing the services, validators secure a substantial amount of income. Therefore, crypto income earners are subject to taxes as individuals perform any operation on the digital currency platform in exchange for remuneration.
Converting Cryptos to Fiat Currencies
The second category of taxable events is when an investor trades his/her digital currency for fiat currencies. For instance, if one currently buys 0.5 BTC for $11,769 and sells it later for 11,000, the trader experiences a trade loss. Whether it is a capital gain or loss, the transaction is still liable to taxes.
Payment for Goods or Services
In today's world, most merchants and overall point of sale platforms accept cryptocurrencies as a payment mode. The payments made within the course of transacting are consequently part of the data required to file the trader's crypto taxes.
Accointing.com: The Ultimate Tax Compiling Destination
Accointing.com establishes itself as a financial tool responsible for maintaining a user's crypto transactions. The tax-based platform runs on a sleek interface that is simple to navigate for newbies and experienced traders. Accointing aims at making traders work easier by bringing a friendly instrument that aligns all the remittance data on their behalf.
Remember, different countries apply different laws, while others do not have any tax regulations concerning cryptocurrencies. For instance, in the U.S, investors may face evasion charges and fraud for failing to produce their tax information. What follows are hefty penalty prices of up to $250,000 or imprisonment for 3-5 years.
As such, middle and large scale traders can be more susceptible to the tax implications since it may be challenging for them to maintain a clear record. Leveraging Accointing.com connects every investor's wallets with the crypto exchanges they interact with from time to time.
Since there are numerous ways to compute a trader's tax, Accointing.com allows users to select the most appropriate method that produces the lowest taxes.
Getting Started with Accointing
Accointing understands that investors may not have useful insights concerning crypto taxes. Due to this reason, the platform employs straight-forward methods that guide you through the most convenient tax solution.
The first step requires traders to transfer and break-down their transactions for Accointing to compute capital gains or losses. The following step gives traders the chance to choose the method in which they will file taxes. Accointing customizes the tax report per a nation's regime.
Lastly, the platform produces a full report in different file formats, which are printable afterwards. However, it is important to note that Accointing is purely an expert approach to deal with every tax requirement and adopt the best strategies for investors.
Furthermore, the tax-based ecosystem provides customized taxing package plans starting from $59 to $259. Each program carries distinct elements such as the number of tax transactions, a 365-day license, professional tax reports, the ability to trace unprecedented transactions, and many more.
The Tax-Loss Harvesting Dashboard
Under the tax-loss strategy, traders attempt to elevate their investment returns or lower their tax rates by selling a losing investment. After selling, the investment is included in another similar investment experiencing a capital gain.
As traders add more cryptocurrencies to their portfolio, the tax-loss strategy becomes complex to follow up considering the massive transactions taking place. Accointing mitigates this problem by integrating a Holding Period Dashboard, which gives a brief on a trader's tax position after automatically calculating their long and short-term capital gains.
In the long run, the Holding Period Dashboard's objective is to reduce the tax expense by selling off the losing investment and adding it to the thriving capital gain, as earlier established. Therefore, the Holding Period tactic by Accointing displays the number of units to be sold on your wallet or exchange as indicated by the dashboard.
Conclusion
Asides from designing tax reports, Accointing delivers additional functionalities to its global audience. Some of the services include API connections with exchanges, real-time crypto market trends, and a world-class portfolio to follow your transaction patterns.
A free-trial opportunity is also available, which delivers a free tax report with 25 transactions. Moreover, the platform assures traders of a "30-day money-back guarantee", a policy that ensures you make the most out of Accointing after paying for the package plans.
Accounting and auditing for every transaction in the crypto space require advanced instruments like Accointing.com to gather up a piece of complete tax information. After that, the final reports are applicable in AML or FBAR audits.
