Cryptocurrency Tools for Tax Professionals
Inherently complex and unfamiliar to many tax and accounting professionals, crypto may be one of the biggest challenges — and opportunities — of the 2020 tax season.
For the first time, the 2020 IRS Form 1040 will include a field dedicated to virtual currency, meaning millions of American traders may be seeing this question for the first time. Many of them will have questions, and they will be coming to you for answers. Here, we'll explain the challenges of cryptocurrencies and share the tools needed to simplify reporting for these unique investments.
What's the big obstacle when it comes to crypto? Every virtual currency transaction is considered a taxable event, but cryptocurrency exchanges don't provide form 1099B like more traditional investment firms. As a result, it becomes the tax professional's responsibility to calculate gains and losses, cost basis, etc. Unfortunately, this can be incredibly complex, particularly if your clients use multiple exchanges.
With uncertainty comes opportunity, and there are undoubtedly opportunities for forward-thinking tax professionals in the crypto space. Virtual currency is no longer a niche — CoinBase, just one of hundreds of exchanges, has more than 43 million users and $90 billion in assets. Fortunately, tools like Cointracker and Ledgible are designed specifically to automate form 8949 for virtual currency assets to easily import into CCH Axcess™ Tax or CCH ProSystem fx® Tax.
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In this two-part podcast series, we sit down with Shehan Chandrasekera, Head of Tax Strategy at Cointracker and regular cryptocurrency contributor for Forbes, as well as Kell Canty and John Wandrisco from Ledgible. During the conversation, these crypto tax experts explains the unique challenges of crypto for tax preparers and share how you can drastically simplify the process with one easy to use tool.
Part 1: The Unique Challenges of Crypto →
Shehan Chandrasekera, Head of Tax Strategy at Cointracker
Part 2: The Impact of Crypto in Accounting → Kell Canty & John Wandrisco of Ledgible
Shehan Chandrasekera, CPA
Head of Tax Strategy, Cointracker
How to Serve Your First Cryptocurrency Tax Client
Read Shehan's incredibly in-depth and informative blog post, covering everything from the basics of how cryptocurrencies are taxed, to examples of completed forms, to highly-specific situations like virtual currencies held in offshore exchanges.
Simply have your clients connect the Cointracker app to their wallets and exchanges, and Cointracker automatically calculates gains and losses, instantly generating tax reports.
Ledgible Tax Pro - built specifically for tax professionals - provides a crypto tax solution designed to simplify the process for you, your clients, and your team members.