Crypto Tax Automation Startup TaxBit Secures Investment from Paypal, Coinbase, and Winklevoss Capital
According to an announcement on Thursday, Paypal, Coinbase, and Winklevoss Capital have invested in crypto tax automation startup TaxBit. The tax compliance startup seems to gain traction from prominent players in the crypto industry. More tax authorities led by the likes of IRS tighten their oversight on cryptocurrency activity.
Winklevoss Capital was already an investor in TaxBit, having participated in their seed round, which raised $5 million. TaxBit is yet to disclose how much it was funded in the latest round of investment by the three industry giants.
As the IRS forges a clear path for crypto tax reporting, stakeholders have made adjustments to meet the set requirements. Per the latest Form 1040 draft, the IRS requires anyone who took part in crypto activity within 2020 to report the same. It outlines that the scope of such activities includes virtual currencies that have been airdropped or transferred for free and obviously transactions involving crypto assets.
“If, in 2020, you engaged in any transaction involving virtual currency, check the ‘Yes’ box next to the question on the virtual currency on page 1 of Form 1040 or 1040-SR.”
Given such developments, the TaxBit crypto tax automation software is among the solutions that firms and retail are looking for to remain tax compliant. This Salt Lake City startup reduces the workload of reporting taxes through two primary applications focused on exchanges, crypto businesses, and consumers. It is not surprising that they have now increased their capital base with support from major contributors to the crypto ecosystem.
Paypal, which recently debuted into the crypto space, is likely to benefit from this investment. More users will be willing to engage crypto assets once the hustle of tax reporting is eliminated. TaxBit Founder and CEO Austin Woodward expressed optimism on the milestone,
“We want to thank our customers, partners, and investors for helping us move the cryptocurrency space forward … This investment will help us achieve our aim of being the most innovative and trustworthy provider of cryptocurrency tax technology.”