How much do you owe IRS in Crypto Taxes? Yes, IRS has announced the last date to file your crypto taxes and it is April 18, 2020. Understanding the complexity of crypto tax computation, Coinbase has released a new “tax center” which will show a user’s crypto taxable activities, including short- and long-term crypto profits and losses, in one spot.
The company’s partner CoinTracker provides free crypto tax reports to Coinbase Pro customers and those who have used an external wallet. Crypto taxes have emerged as an essential source of additional income for the U.S. government as it looks to pay for new trillion-dollar infrastructure and other spending commitments.
To combat crypto tax-dodging by whales in the past, the government concentrated its efforts on identifying and prosecuting such individuals.
But in the past two years, the IRS has taken a far more comprehensive approach, including utilizing the ordinary 1040 form to question every American whether they hold cryptocurrency, which is a violation of federal law.
For this reason, and others, an entire business has emerged around tax and compliance software for the cryptocurrency market. However, although Coinbase’s new tax center would simplify crypto tax preparation for many of its users, the business is not releasing a document known as a 1099. The one used by banks and brokerages to inform consumers how much money they received from dividends and investments.
Customers that make a considerable amount of money via fees and incentives will get 1099s from Coinbase, a spokeswoman for the business states.
For tax purposes, the IRS does not require Coinbase to provide 1099s to sell crypto assets. Nevertheless, the company will offer 1099-MISC IRS forms to users who earned more than $600 in fee revenue incentives for the 2021 tax year, according to the spokesman.