If you had crypto in Celsius, Voyager, FTX, or other platforms that are no longer operating, you may be eligible for a deduction on your returns.
Trading between one coin to another must be reported to the IRS. Yup, even if you did NOT cash out to USD or another “official” currency, the trade must be reported. 📈
The IRS has been scanning taxpayers’ bank accounts to determine if they have had any transactions with any exchanges – if they notice this & you do not have crypto reported on your return, you may receive a letter, notice of examination, or other request, such as a reminder to correctly complete your return.
Other activities that must be reported include trading or minting NFTs, mining of crypto, and staking rewards.
If you had a realized loss on your crypto, you may have some possible tax strategies available. Same applies for those that made money in crypto this year.
Crypto scams actually may qualify for one of several different types of deductions, so if you had any type of crypto fraud, it is likely we can get you a [sometimes significant] deduction/refund for this.
You may receive a 1099-K from your exchange, even if you lost money. Remember, it is required to report any realized crypto activity, even if there is a loss.
Crypto gambling/wager activity has its own reporting rules – please make sure to have your win/loss reports ready 🎰
Last point:if you have more than a few dozen crypto transactions and are not already using a software to put these in IRS-required “form 8949” format, please reach out to us right away. This is absolutely critical because reconciling your trading activity in the correct IRS format often takes far more time than preparing the actual tax return, and in years past we noticed many prospective clients searching for this service late-season and unable to secure support due to being too close to the deadlines. Just to reiterate, if you have been trading crypto, we strongly recommend to get your trading cleaned up & in the right format now. There are a variety of tools and ways to do this, so just contact me if you need information.
Reach out to us by replying to this email if you need help or clarification on any of the above. Please let me know by Friday.
Many thanks!
—
George Dimov CPA
www.dimovtax.com
(833) 829-1120 toll free
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