If you’re purchasing bitcoin or other forms of cryptocurrency, you’re probably well aware that they’re not technically money. However, if your possession of them has resulted in earnings, you’ve gained taxable income. Obviously, the IRS wants to know if you’ve made money off of crypto.
As a recent article from Bradford Tax Institute discusses, The IRS expects taxpayers to report any crypto earnings on their taxes. Going a step further, the field can’t be left blank even if you know nothing about cryptocurrency.
But the problem is that the question is confusing, asking if you’ve received, sold, exchanged, or otherwise disposed of any financial interest in any virtual currency. What makes it confusing is that it’s worded broadly and could lead people to think they need to respond with “yes” if they purchased any crypto or got it as a gift. But in reality, you only need to answer “yes” if you received taxable income from the crypto through various means.
If you’re concerned about whether you answered this field correctly or if you need to file an amendment to your taxes, we can help guide you through any next steps. Contact us today to get started!
Integrated Accounting & Tax, LLC is a woman-owned accounting firm with services tailored to each client’s unique needs and goals. We guarantee that every service we provide is essential and propels your goal.
Contact us today for a free tax services consultation. We have locations in Prior Lake, MN, and Ft. Lauderdale, FL, and can provide service to surrounding areas.