Credit Karma Shows Crypto Tax Submitters Rise Nearly 5x but Large Portion Still Not Filing Reports
According to Credit Karma, there has been an increase in the number of short-term crypto losses just in the first month of 2019. Credit Karma Tax is a tool that was released by Credit Karma in 2016. The firm offers users a free tax filing service that can be used by crypto traders to report their losses or gains.
Tax Filers Increase in 2019
Credit Karma released on April 3 that the number of Credit Karma Tax filers claiming short-term crypto losses on their federal returns in January has experienced an important increase year over year.
Although cryptocurrencies experienced a very good year in 2017, the company explains that a small number of individuals reported crypto taxes in 2018. Things seem to be changing in 2019. The number of Credit Krama Tax filers that reported short-term capital crypto losses in the first month of 2019 soared by 521 percent compared to the last year.
Short-term gains or losses take place when investors sell an asset that is held less than a year. However, long-term gains and losses are related to virtual currencies that have been held for over a year. It is worth mentioning that long-term crypto investors increased by 35 percent year over year.
Moreover, the average short-term crypto losses were $3,405, an increase of 322 percent compared to the last year.
The company Ernst & Young has recently launched a new tool for accounting and preparing taxes on cryptocurrency holdings. This would allow users to present their taxes and facilitate accounting calculations related to digital currencies.
2018 was a very bad year for digital assets in terms of price action. Most of the digital assets lost more than 80% of their value. The market is expected to grow in 2019 and 2020 ahead of Bitcoin’s halving in May 2020.