There are varying opinions about crypto, but everyone can readily agree that taxes are a common source of intimidation. A lot of people are unsure of how to file taxes on bitcoin. The truth is that there are programs that make it very simple. Crypto gets taxed based on the length of time you have it before you decide to trade or sell. It then falls under short term or long term gains taxes.
Thankfully, there is available software that can compile everything for you. This takes some of the weight off of having to fully understand everything tax-related. You can manage without the software, but the process tends to be more challenging and time consuming with more room for error. It’s similar to filing your taxes with or without one of the large tax software companies like Turbo Tax. If you are curious about the in and outs of crypto taxes, you can find an in depth tax guide here.
The Best Software For Bitcoin Taxes
There are many different kinds of crypto tax software, but the one I use is Crypto Trader Tax (10% discount code: CRYPTOTAX10 ). The software is easy to use and doesn’t cost very much. It links to most large exchanges and pulls data directly off your account. It then links to the large tax software companies to make uploading your trade history easy. Filing my crypto taxes took me less than 10 minutes this year.
This covers the basics on how to file taxes on bitcoin and, for the most part, 95 percent of people wont need to know more than this. If you don’t have any Bitcoin to file on your taxes, try reading about Ways to Earn Bitcoin.