More

    The IRS Wants to Know If You Interacted With Cryptocurrency in Any Way in 2019

    • A new form has been released by the IRS looking to know whether you’ve acquired, exchanged, or sold a digital currency.
    • Earlier this year, the IRS sent a letter to taxpayers who’ve made transactions in cryptocurrencies to pay their taxes and file amended returns.

    The Internal Revenue Service (IRS) has released a new Schedule 1 for 2019 tax season, putting out the details on above the line deductions, health savings account contributions, and tax break for student loan interest.

    More notably, IRS has also thrown in a question regarding digital currencies, “At any time during 2019, did you receive, sell, send, exchange or otherwise acquire any financial interest in any virtual currency?”

    This is the agency’s latest attempt to gather more information on taxpayers’ digital currency holdings.

    “The biggest thing is that the IRS is asking this for a reason, and my question is how much have you increased your audit risk by checking ‘Yes’ in response?” asked Jeffrey Levine, CPA and director of financial planning at BluePrint Wealth Alliance in Garden City, New York.

    As a matter of fact, the IRS has signaled that it would take a closer look at virtual currencies.

    Earlier this year, the agency sent letters to over 10,000 taxpayers who made virtual currency transactions but may have failed to report income and pay taxes on what they owed.

    Tax Basics on Cryptocurrency

    Have you sold any of your cryptocurrency? Then, you need to report the transactions. And if you made capital gains on that, you need to pay the appropriate tax.

    In case, you received cryptocurrency from your employer, it is subject to federal income tax withholding, just like wages and should be reported on Form W-2.

    Independent contractors paid in cryptocurrency must pay self-employment taxes a well.

    If you are involved in mining crypto, the fair market value of the virtual currency on the day of receipt should be included in your gross income, as per IRS guidance.

    Failure to report these transactions can result in you getting audited and held liable for interest and penalties. One could also face a fine of up to $250,000 and prison time, in extreme cases.

    “For tax purposes, the virtual currency is treated as property, similar to a security,” said April Walker, lead manager for tax practice and ethics at the American Institute of CPAs.

    So, make sure you keep track of your transactions related to virtual currency along with the cost basis.

    Get Free Email Updates!

    *Action* Enter Best Email to Get Trending Crypto News & Bitcoin Market Updates

    I will never give away, trade or sell your email address. You can unsubscribe at any time.

    AnTy
    AnTy
    AnTy has been involved in the crypto space full-time for over a year now. Before his blockchain beginnings, he worked with the NGO, Doctor Without Borders as a fundraiser and since then exploring, reading, and creating for different industry segments.

    [Alert] Use the author's self-conducted information at your own risk, do you own research, never invest more than you are willing to lose.

    [Disclosure] The published news and content on BitcoinExchangeGuide should never be used or taken as financial investment advice. Understand trading cryptocurrencies is a very high-risk activity which can result in significant losses. Editorial Policy \\ Investment Disclaimer

    LEAVE A REPLY

    Please enter your comment!
    Please enter your name here

    3,266FansLike
    2,732FollowersFollow
    4,091FollowersFollow

    Live Bitcoin Price & Latest BTC Chart News

    Today's Latest Crypto News

    Swiss Private Banking Giant Julius Baer Adds Digital Asset Trading And Crypto Custody Services

    The major Swiss wealth management and private banking group Julius Baer just launched, in partnership with Seba, its new custodial and trading cryptocurrency services. The...

    Iran's Ministry of Industries, Mining, and Trade Grant More Than 1,000 Crypto Miners Licenses

    Iran is regulating crypto miners after a new licensing regime has been introduced by the country’s government. According to an official representative from the Iranian...

    CME Gaps for Bitcoin Price Fill over 95% of the Time: Research

    CME Gaps are popular topics that frequently get talked about in the crypto market, which usually has seen Bitcoin dumping. These Gaps occur because unlike...

    The Upcoming Cut in Bitcoin Supply Means Zero for BTC Price Says, Analyst

    Searches for bitcoin halving on Google Trends on an uptrend “Makes no sense” to discuss if the halving is priced in says economist...

    WEF's New Global Consortium To Focus On Cryptocurrency Governance Framework

    The World Economic Forum (WEF) has announced the creation of a global consortium which will come up with a governance framework for all cryptocurrencies...

    BitcoinExchangeGuide is a hyper-active daily crypto news portal with care in cultivating the cryptocurrency culture with community contributors who help rewrite the bold future of blockchain finance. Subscribe on Google News, see the mission, authors, editorial links policy, investment disclaimer, privacy policy. Got News? Contact us, we are human too. Note: nothing here is financial advice, do your own research thoroughly.