With the increasing popularity of digital currencies, comes new regulations. Just as if you have put funds into a ROTH IRA or any other retirement savings plan, the government has now issued taxes that are due for cryptocurrencies. That's right, soon every single transaction whether you bought or sold digital currency will need to be tracked and accounted for on your taxes.
Manually trying to keep up with which coins you bought and sold can become a huge headache real quick. Luckily there is a new platform that will help you sort out your digital currency transactions so that you will be prepared for tax season, introducing TaxBit.
What Is TaxBit?
TaxBit will help you to keep records of every single coin that has flowed in and out of your digital wallet. In the end, it will help you to stay organized instead of being nailed with a massive payment to the IRS at the end of tax season. Think of it like TurboTax for cryptocurrencies.
When looking at the company and who runs the show, there isn't much information available. In fact, the only real information that is provided is a generic contact form so that you can ask questions. The email address that is submitted goes to “[email protected]” The fact that there are no names listed anywhere on the site is a bit alarming.
The only way to learn of who is behind Taxbit is to hunt for information online. According to a quick search, you will find that a man by the name of Austin Woodward from the United Kingdom is behind TaxBit. TaxBit has social media accounts on Facebook, Twitter, and LinkedIn.
According to Facebook, there is no information about when TaxBit registered. In fact, you won’t find much of anything on their facebook page. As for Twitter, the site states TaxBit joined back in January 2016. However, the company only has two followers over the course of two years and no tweets.
TaxBit Real-Time Crypto Trading Transaction Tax Calculations Product
According to the site, TaxBit offers users an easy to understand the platform. The system is set up to help cryptocurrency traders keep their transactions accountable. TaxBit provides the users a way to track their taxable gains. Due to the recent laws in the United States which says that digital currencies are now considered real property, every single buy, sell, and trade needs to be submitted for tax purposes.
The platform helps users of cryptocurrencies by separating the gains and losses of each transaction so that come tax season everything is in order, and the sum that needs to go to the IRS has already been set aside for you.
Right now, the product is in “Pre-Order” status. The site lists four plans. “Basic” plan comes in at $25 for the year with a limit of 250 transactions and 10 exchanges or wallets. The normal price will be $50 after the promotional release has ended. The second plan is the “Plus” plan that costs $75 with a regular price of $150. This plan allows 2,500 transactions and unlimited exchanges or wallets.
The third plan is for the “Pro” account which runs $250 a year with a normal price tag of $500. The “Pro” plan allows for unlimited transactions as well as exchanges or wallets. The last plan is for a lifetime membership which runs $999. The site mentions that there are only 500 spots available for the lifetime membership which allows a user unlimited transactions and wallets/exchanges.
While the world of cryptocurrency continues to flourish, more laws will be issued. There is no way around it, the government will want its cut and will get it by enforcing new taxes on digital currencies. Now, with TaxBit, the convenience of keeping everything organized for you is a plus. According to the site, they offer a platform that will withhold the funds for taxes and keep everything organized for you.
However, due to the nature of the system, there are a few red flags that come up. First off, there is not enough information about the owner of TaxBit. The fact that they have held a social media account and haven’t done anything with it should make one wonder. Especially since their Twitter account has been active for two years with no tweets.
One would think that they would want to try and get the word out, but there isn’t much information about them. Like any other tax service, you know exactly who you are dealing with. Unfortunately, there is no information about anyone on the payroll of TaxBit. The generic contact us page could go to anyone.
The second red flag is the cost. While paying $25 right now for the year doesn't seem all that bad, the question remains, where does this fee go? Who does the funds to go after you purchase the service? There is no information on whether this platform is something you download, or if you have to use it online.
If you download it, the possibility of keeping your information private would suggest TaxBit is striving to be like TurboTax. However, if you have to use the service online, then you are looking at possible hackers stealing your wallet information and your coins.
The cons far outweigh the pros when looking at this site head-on. It would be best to test the waters first, before diving in. While the idea is brilliant to help those who deal with cryptocurrencies, you will have to make your own choice as to whether or not you want to risk your digital currency for a program that may not help you in the long run.