Cryptocurrency Taxes

Business & Corporate Finance Consulting

Are You on that Crypto Yet? Cause I am...

If you're looking for a tax pro that knows crypto, then Phill is The One (NEO... Matrix...crypto...get it?!) Phill is not only a personal investor in BTC and other alt coins, but Carson & Co represents clients that invest long-term, actively trade, as well as Mine as a Business (MaaB). We're here to help guide you through the taxes of the most exciting technology and investment opportunity in a generation.

Does he accept BTC as payment for tax service?? SURE DOES!

Why Would I Need a Cryptocurrency Tax Accountant?

One of the most common misconceptions about cryptocurrencies is that, because they are not issued by a central government, there is no need to pay taxes on profits from trading or mining them. While this is indeed the case in some countries around the world, users in the United States are not so lucky.

In the United States all profits made from the purchases and sales of digital currencies such as Bitcoin and Ethereum are subject to capital gains taxes. This is because they are treated as property (much like stocks, real estate, or gold). However, it’s important to keep in mind that all the rules that apply to these other assets do not also apply to cryptocurrencies.

The laws around how crypto taxes work are fairly new and will continue to evolve alongside this groundbreaking technology. This makes it all the more important to consult an expert if you’ve experienced profits (or losses) via any cryptocurrency related activities.

What are the United States Cryptocurrency Tax Rules?

While every individual’s experience is different and subject to the tax laws of their specific jurisdiction, the high-level cryptocurrency tax rules you should be aware of are that:

Trading from a cryptocurrency to fiat currency like USD is a taxable event
Trading from one cryptocurrency to another cryptocurrency (i.e. from Bitcoin to Ethereum) is also a taxable event
Spending cryptocurrency on goods or services is a taxable event
A transfer of the same cryptocurrency from a wallet address to another wallet address is not considered a taxable event, but you should still maintain a record of the transaction
Selling coins that were mined is considered a taxable event
Selling coins that were airdropped via a fork (i.e. Bitcoin Cash received from the Bitcoin fork) is considered a taxable event
Trying to hide cryptocurrency assets or profits is considered tax evasion
Capital gains losses can sometimes be claimed on cryptocurrencies sold at a loss
Businesses based on mining or using crypto have unique guidelines
Holding cryptocurrency without selling is not considered a taxable event

These bullet points are a brief summary, but there are other detailed rules and regulations around crypto taxes that any serious trader or miner should be aware of. If you took part in anything other than simply buying crypto to hold in a wallet, you should highly consider discussing your potential tax liabilities with a professional. While the laws will continue to develop, one thing is clear: the IRS expects you to make a good faith effort in reporting cryptocurrency activities.

With the spread of quick access to investing in the U.S. via Coinbase and popular Coinbase alternatives, the need for expertise in crypto taxes continues to spread. The technology is exciting, but many people are failing to grasp the reporting requirements. A clear understanding of your personal tax responsibilities is vital to participating in this growing economy. Contact Phill Carson today to ensure that you are properly reporting all cryptocurrency related activities!

Not Just a Tax Return

Go to any tax firm, use TurboTax or H&R Block and you’ll get a lot of the same stuff. They all have free wage tax calculator tools. Guaranteed, you’ll get an individual tax return Form 1040 with a lot of other IRS forms with IRS efile. No shock there. Hopefully for your sake it’s a good one, because when most people look at a tax return they have no clue if it’s “right”, “wrong”, “good”, or “bad”. It’s not just about your IRS tax refund. It’s not just about what tax bracket you’re in. Maybe this firm has a secure website you can electronically send files. Lovely – we have one too. NBD. Everyone should have it. But since Equifax and Yahoo, let’s be real; no one is really safe from identity theft, so we communicate with our clients anyway they choose: G-Drive, Dropbox, snail mail and anything in between.

We’re here to make the tax process as simple as possible. But not just simple, but FUN! So let me entertain you with the most [_____] (insert adjective based on your age: 18-25 “lit”, 26-34 “bomb”, 35-44 “totally bitchin”, 45+ “agreeable”) social media posts on the inter-web! My posts will leave you laughing all while subliminally delivering highly technical tax content. Be sure to follow @PhilCarsonCPA on twitter, IG, and facebook. For longer content, subscribe to my email blast. Each blast comes with at least 3 curated GIFs that keep you learning all that juicy tax knowledge as your eyes move down the page. That’s the Carson touch. That’s the magic. That’s the secret sauce there for the taking. Look out, Big 4 accounting firms. Phil Carson, CPA is coming for ya. Try and stop me!