The IRS has made clear it expects taxpayers to declare income from bitcoin sales. Not to worry, the Fort Lauderdale accountants of Sterling Accounting are here to help with this and every other tax issue.
According to CoinDesk, the IRS reiterated Friday that it expects taxpayers to account for their cryptocurrency winnings. The site reports:
In Friday’s release, the IRS expanded on its position, stating that payments made in cryptocurrencies must be reported to the agency.
“A payment made using virtual currency is subject to information reporting to the same extent as any other payment made in property,” the agency said.
Notably, the release once again explains that the IRS classifies cryptocurrencies as property.
Penalties for failing to report cryptocurrency payoffs can go up to criminal prosecution. But the requirement is not something to be too concerned about, according to Yahoo!:
This is simpler than it sounds. If you bought one whole BTC at a website like Coinbase when the price was $1,300, your cost basis was $1,300 plus whatever you paid in fees—call it $1,500 total. If you sold your bitcoin two months later when it was at $1,900, your gain was $400. The taxes you must pay on that gain depend on your income bracket, and on whether it was a long-term or short-term gain.
Bitcoin miners also need to be aware that their gains are subject to taxation, Yahoo! adds.
The other thing you can do is consult with experts such as the Fort Lauderdale accountants of Sterling Accounting. We are experts in tax preparation of any kind and find solutions, including sometimes-overlooked deductions, that minimize your tax liability. Further, we are specialists in handling all tax matters for any size business of any kind.
So a little thing like dealing with your cryptocurrency gains will pose no problem for the Fort Lauderdale accountants of Sterling.