Holy crap this tax stuff is confusing. I probably traded less than $1000 in crypto all year, can I just ignore everything and pay like $100 or something?
I was messing around with crypto all year, buying and selling $10-20 here and here. I probably used like 7 different exchanges. I’m totally screwed now that I’m filing my taxes.
I cant imagine i owe more than like $100, is there a way to just report that I owe 100 and be done with it instead of trying to figure all this out?
I tried using crypto.coms tax program but it had an error with every single CSV i uploaded and it didn’t sync with my binance tax API key either. I’m so lost and frustrated I’m ready to just be done with this.
47 thoughts on “Holy crap this tax stuff is confusing. I probably traded less than $1000 in crypto all year, can I just ignore everything and pay like $100 or something?”
To be honest I feel government should just tell us how much we have to pay by end of year
Consult a tax professional, but…
You are required to report profit. You are not required to report cost. If you want to go ahead and say your cost basis was zero because you can’t find documentation of actual cost, that is allowed. If your under 1k in profit this won’t raise any red flags.
This is why we need El Salvador’s 0% crypto tax!
Koinly worked wonders for me
You can do whatever you want, but if you get audited expect even more headache. I had a nightmare too and it’s not finished yet. I had over 260 trades on only one coin. I made up a spreadsheet in Excel but if you’re not familiar with it forget that idea.
Just make a start and keep going. List all buys and sells for the same coin and work out how much profit you made on the sells and report it. You will also need to carry this forward so set it up so you know what you’ve done and can continue it this year.
I’m in the same boat. I will say that I’m double checking my work on koinly, fill out the two forms manually, and save my hard earned money in paying someone else to file my shit.
If I mistake and the IRS wants to audit, go right ahead. I’m clean barring the honest mistakes.
I don’t know anything but I’m downloading Koinly after seeing everyone say it
It’s a joke how hard they make it to report and do no effort to make it easier.
Buy high and sell low to avoid headaches in crypto.
I extracted my Cointracker CSV file and Turbotax thinks I made all my purchases in Cointracker and that instead of purchasing about $3K worth of crypto it thinks I did 10X that amount.
While I have a 8949 form from Coinbase, there is no feature in Turbotax to simply upload the document.
That’s why they wanted **You** to calculate it lol
Pay a program to do it or pay someone to do it. If you do a program, you get audit. You represent yourself. So I would suggest printing off any paper work incase that happens. If someone does it for you, you get audit. They do everything for you.
Don’t mess around with it. Better safe than sorry.
I feel bad for our USA or people from the other countreis which require this stuff… It would probably demotivate me to even start crypto at all
When you lost your hole money you don’t need to pay taxes.
Edit: Pls somone put the right Gif under this comment
Koinly will be your best friend!
The Tax Man Cometh
Just wondering does Coinbase give you tax documents?
If you didn’t get a 1099, then… 🤷🏻♂️
Go try Taxbit (the free version includes unlimited transactions). It was really straightforward and created a FORM 8949 for me any everything. And then I remembered I was a Canadian, Canadians do not have to pay taxes for buying or holding cryptocurrency, and said fuck this nonsense and went back to living large.
They will hunt you to get your $100. Be careful!
*Portugal has entered the chat*
You could save much more effort by investing in a deep sea yacht cruise
If you use turbo tax, you can use their partnerships with exchanges to upload documents. The only one I’m waiting on is Uphold (I regret ever using them). I should be able to transfer everything over and do 0 work on the 24th.
This was an extremely simple and uncomplicated process for those trading on Coinbase/CB Pro, fortunately
Honestly the IRS should just send people tax bills and you can either pay it or go through the mess of filing your taxes in order to maybe pay less.
Nice try IRS
For the most part I’m in a similar situation. Did a lot of swaps just to move tokens around, but never cashed out, so my profit is negligible. I’m doing the best I can to report but not stressing. Estimating some things and ignoring others.
Here’s my 2 cents:
1. I have around -150$ Net gain for the stocks, I’ll use it as a capital loss to deduct from my capital gains
2. Have you profited from the crypto this year? If not majorly, just declare the biggest transactions, calculate the gain/loss and if you’re in positive, deduct tax. I think 100$ should be enough to cover.
I prefer to sell at a loss, that way I don’t have to report anything.
Fuck the irs
Buy high and sell low. Don’t have to worry about taxes then
I just didn’t do it to not worry
If you don’t sell, you don’t pay taxes.
yeah i just use a crypto tax software to avoid all of the stress, the one i’ve been using is good – it’s like $100, but worth it imo (and I think they have a cheaper option that’d suit you with less txs)
The IRS has recently hired 5000 new agents… Many are specializing in crypto tracking. The days of blowing it off are over.
Give koinly a crack.
Just do the best you can. If you make an honest effort to pay your taxes and can justify each decision you should be fine. I’ve heard that if audited the irs is actually not so bad to work with. Have all your docs save and if it gets questioned produce them – they’ll have to wade through the same quagmire and as long as you’re in the right ballpark shouldn’t be too big a penalty, and if you overestimated could get a refund! I tried out a couple of the crypto tax tools and stuck with the one that seemed best, have to modify tons of transactions where the other side isn’t pulled in (eg bridge transfers, unsupported L2s and alt chains) but haven’t been called up yet and know the number is close and if anything a bit of an over estimate.
PS – dont f w the irs give them the money no matter what it takes.
I had 100+ transactions throughout the year, and I kept track of those on a spreadsheet. Even then I found it difficult to add it properly for tax filing, so ended up making use of koinly. Yes, it did cost $100, however, it matches the buy and sell such that you lose minimum in taxes.
If you have less than 75 transactions (IIRC that is the limit to manually add each entry in TurboTax), add it manually as accurately as you can, or else use a 3rd part service like koinly. Btw, use freetaxusa or such to save money on the actual tax filing as well rather than TurboTax or such.
As everyone is saying, use Koinly and import the transactions from all your exchanges and it will calculate your taxes.
If you can’t work it out they probably can’t either lol
There are online crypto tax services that you can give read only access to your exchange APIs that will read off your entire trading history and calculate your net gain/ loss and any taxes you will have to pay on said gains. The services are pretty cheap considering how much time and effort it removes from the process.
I think last year I made something like 200 crypto buy/ sells like fuck I was gonna download my exchange histories and manually calculate my gains using proper FIFO accounting.
I mean I made some money, took it out and then lost it all in the dip
What would the taxes be like of i hodl and never sell?
Fear of taxes easily turned me into a long term holder