Crypto Tax Services

Every day, opportunities to grow personal wealth through participating in a new financial environment become more and more consistent: cryptocurrency. But like all good things, great opportunities often come with distinctive tax obligations that can, at times, appear to be an unsolvable jigsaw puzzle. Wasserman CPA focuses on making the crypto tax obligations of consumers easier. Having worked on 30 years of knowledge and with clear understanding of IRS expectations, we offer solutions as per your crypto taxation.

Crypto Taxation Implications

The IRS considers cryptocurrency property, not currency, and each trade, sale or exchange is considered a taxable event. In summary, cryptocurrency transactions are taxable events and tax obligations related to your cryptocurrency holdings have extreme significance in terms of compliance and your financial picture.

Top crypto tax considerations include:

• Taxable Events: If an action brings about a capital gain in cryptocurrency such as selling, trading, or converting to fiat, it is a taxable event. Even converting one cryptocurrency into different cryptocurrency is a taxable event.
• Capital Gains Tax: Same as stocks and real estate assets, cryptocurrencies are also taxed on their capital gain. The applicable tax rate would vary depending how long they had been held. If you are holding crypto for under a year, profit will be taxed as a short-term capital gain. Which are the returns that these traded funds have but with higher rates compared to long term holdings.
• Mining and Staking: Crypto-income earned by mining or staking is deemed regular taxable income. The IRS has strict rules governing such income and Reporting it correctly is important to avoid penalties.
• Airdrops and Forks: “Free” crypto assets, such as airdrops, forked coins and other acquired assets that you did not purchase, are also taxable. These assets must be recognized at a value from when they were received and to be treated as income.
• Reporting Requirements: Crypto assets and trades are required to be reported on the tax forms, including Form 8949, and Schedule D, income from the mining activity should be reported on the Schedule 1.

Our Process

For many, crypto taxation can be a complex affair. At Wasserman CPA, we have created a simple process to take some of the work out of each step in the process for our clients:

• Free Initial Consultation: We will start with a consultation or short email back and forth dialogue to establish what cryptocurrencies you are working within and how we can best assist you.
• Step up your record-keeping: Good crypto tax reporting starts with having accurate records. We analyze your transaction history in crypto, as well as cold storage and hot wallet accounts and any income that you earn via staking, mining or airdrop activity.
• Calculating Gain and Loss: With the use of proper software and a deep understanding, we precisely calculate all capital gains and losses. Traders also meticulously review all conversions, trades, purchases and sales to be sure nothing was missed.
• Compliance and Filing: We correctly file all relevant tax forms on your behalf including Form 8949 to report gains and losses. Requires verification to avoid any potential surprises with IRS standards.
• Ongoing Support: Crypto tax obligations are never done merely by filing the right tax forms. Throughout the year, we offer our client updates in the event of regulatory changes. Of course, Wasserman CPA is here to answer all your questions and inform you of any tax savings that may be available.

Our Offerings

Wasserman CPA provides all around services when it comes to crypto tax compliance with areas from planning, compliance, and crypto loss harvesting.

Crypto Tax Planning

“Failing to prepare means you are preparing to fail.”. With each individual being potentially liable for their own crypto tax obligations, we take a wide lens in our smart planning strategies:

• Our goal is to limit tax liabilities that can be associated with the sale or trade by ensuring it is done at the optimum time.
• We devise an approach to minimize short-term capital gains which are typically taxed at a higher rate.
• We present succinct advisory on holding periods to qualify for long-term capital gains for which lower tax rates are applicable.
• We return to charitable donations with a few pointers about donating cryptocurrency for maximized deductions.

Tax Reporting and Compliance

There are some reporting requirements (see above section). We allow you to comply with IRS rules for crypto tax filing requirements.

• Preparing IRS form 8949 which lists all crypto sales, trades and exchanges, plus additional forms if needed
• Anything you earned from mining or staking activities must be reported on your tax return.
• The reports regarding the airdrops, forks or other crypto income need to be accurate.
• Dealing with IRS letters or audits related to crypto tax issues.

Crypto Loss Harvesting

For example, in the case of crypto losses, we pay 100% to help you harvest to offset gains from your other investments. There are a number of rules in the process, all regulated by the IRS.

• We explore the Income Tax Act and Income Tax Regulations to identify critical opportunities to realize capital losses (i.e., sell underperforming assets).
• Wasserman CPA provides strategies on how losses can reduce your overall tax liability for the tax year.

Software and record-keeping practices

It is common to make cryptocurrency transactions in different exchange platforms and wallets. For investors, accurate and updated transaction records may appear daunting, However, Wasserman CPA has solutions for it as discussed below:

• We provide advice about obtaining software that will help you easily record your transactions.
• We help you with the organized file setup in the software that will satisfy IRS norms.
• We will continue to support future crypto transactions.

Our Approach to Crypto Taxation

• Experienced Guidance: With over 30 years of experience in the business, we know the IRS guidelines inside and out. Our experience makes the difference between how they relate to newer financial instruments such as cryptocurrency.
• Tailored Services: We cater to the unique needs of miners, traders and investors — or all three.
• Humanized Support: We won’t just run the numbers. We simplify every part of your tax matters and keep you informed and in charge.

Contact Us

Crypto tax shouldn’t be an added layer. We offer extensive crypto tax services to make it easier and more profitable for traders, investors and miners to focus on building their wealth. Call Wasserman CPA today for a consultation and let the crypto tax optimization begin!