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The Latest on Crypto and Taxes
Although Bitcoin and other cryptocurrencies have been around for years, they’ve only recently begun to gain mainstream adoption. And as more people invest in crypto, more questions are being raised about how these digital assets are taxed. Here’s a look at the latest crypto tax news.
The IRS is Coming for Your Crypto
The Internal Revenue Service (IRS) is cracking down on cryptocurrency owners who have not paid their taxes. In July, the IRS issued a notice warning that it would begin aggressively pursuing taxpayers who have not reported their cryptocurrency holdings on their tax returns.
This is not the first time the IRS has taken action against cryptocurrency owners who have not paid taxes. In 2016, the agency began issuing Letters 6174 and 6173 to taxpayers who it believed had not reported their cryptocurrency holdings. The letters warned taxpayers that they could face civil or criminal penalties if they did not pay their taxes.
The IRS is now taking a more aggressive approach, sending letters to more than 10,000 taxpayers who it believes have not reported their cryptocurrency holdings. The letters warn that taxpayers could face penalties of up to $250,000 if they do not pay their taxes.
This is a significant escalation of the IRS’s enforcement action against cryptocurrency owners. The agency has made it clear that it intends to collect taxes on all crypto holdings, regardless of whether they were purchased with fiat currency or mined.
The IRS’s crackdown on crypto tax evaders comes as the price of Bitcoin and other cryptocurrencies has surged in recent months. The agency is no doubt hoping to capitalize on the increased value of crypto assets to boost its tax revenue.
If you have not yet reported your cryptocurrency holdings on your tax return, now is the time to do so. The IRS is clearly cracking down on those who evade paying taxes on their crypto gains, and the penalties for doing so can be severe.
The Taxman is Watching
The IRS is seeking to hire a tech company that will help it track cryptocurrency transactions and wallets. In what some are calling a “move toward greater regulation” of the digital currency space, the IRS put out a request for information (RFI) last week, asking for proposals from companies that can provide “transaction tracing, wallet identification, and data analytics” services.
The news comes as government agencies and tax authorities around the world are starting to pay more attention to cryptocurrency. The IRS has been vocal in its efforts to crack down on crypto tax evasion, and last year it sent out 10,000 warning notices to taxpayers who it believes failed to report their crypto holdings. The agency has also begun issuing levies and liens against those who owe taxes on their crypto gains.
Meanwhile, other countries are taking steps to bring cryptocurrency into the regulatory fold. South Korea recently announced plans to tax capital gains from cryptocurrency trading, while the European Union is mulling over plans to do something similar. And in the U.S., lawmakers have introduced a number of bills that would impose new taxes on crypto transactions.
With all this activity, it’s clear that the taxman is starting to take cryptocurrencies seriously. If you’ve made any gains in digital currencies, make sure you consult with a tax professional to ensure you’re complying with all applicable laws.
Don’t Miss Out on These Tax Deductions
It’s important to stay up-to-date on the latest tax news, especially if you’re involved in the cryptocurrency space. That’s why we’ve put together this list of can’t-miss tax deductions for crypto investors.
1. The cost of your cryptocurrency mining rig. If you’re mining cryptocurrency, you can deduct the cost of your mining rig from your taxes. This deduction is available whether you’re mining for profit or for personal use.
2. Cryptocurrency trading fees. If you’re trading cryptocurrency, you can deduct the fees you paid to trade from your taxes. This deduction is available whether you’re trading for profit or for personal use.
3. The cost of your cryptocurrency storage. If you’re storing cryptocurrency, you can deduct the cost of your storage from your taxes. This deduction is available whether you’re storing for profit or for personal use.
4. Cryptocurrency consulting fees. If you’re paying a consultant to help you with your cryptocurrency investments, you can deduct the fees you paid from your taxes. This deduction is available whether you’re consulting for profit or for personal use.
How to Stay Ahead of the Curve
Crypto tax laws are changing rapidly, and it can be tough to keep up. Fortunately, there are a few key resources you can rely on to stay informed. Here are the top three crypto tax news sources you need to know about.
Get Professional Help
If you want to stay ahead of the curve, it’s important to get professional help. There are a lot of experts out there who can help you make sense of the complex world of crypto taxes.
There are also a number of software programs that can help you keep track of your crypto taxes. These programs can be a great way to stay organized and to keep on top of your tax obligations.
Whatever route you decide to take, make sure that you get professional help when it comes to your crypto taxes. It’s the best way to ensure that you’re staying ahead of the curve.
In order to stay ahead of the curve, you need to be sure that you are always up-to-date on the latest crypto tax news. This can be difficult, as the field is constantly changing and evolving, but there are a few key ways that you can make sure you are always in the know.
One of the best ways to stay informed about crypto tax news is to follow reputable sources of information. These sources will usually be reliable and will often provide updates on a regular basis. They may also offer commentary and analysis on the latest news, which can help you understand it in greater depth. There are a number of different sources of information that you can follow, but some of the most popular include:
-The Crypto Tax Newsletter: This newsletter provides weekly updates on all the latest crypto tax developments, both in the United States and internationally. It also offers commentary and analysis from a variety of experts, making it a valuable resource for keeping up with the latest news.
-The Crypto Tax Blog: This blog provides regular updates on developments in the world of crypto taxation. In addition to offering commentary and analysis, it also provides links to relevant primary sources, making it an excellent resource for anyone wanting to stay up-to-date with the latest news.
-The Crypto Tax Twitter Feed: This Twitter feed provides regular updates on all the latest crypto tax news. It is an excellent way to stay up-to-date with what is happening in the world of crypto taxation, and to learn about new developments as they happen.
One of the best ways to stay ahead of the curve is to stay organized. This is especially true when it comes to your finances. Keep track of every crypto transaction you make, no matter how small. This will make it much easier to calculate your taxes at the end of the year.
Another way to stay organized is to keep track of changes in the cryptosphere. Subscribe to newsletters, follow blogs, and join discussion forums. This way, you’ll always be up-to-date on the latest news and developments.