Many Americans made money last year in the cryptocurrency market, but does that mean can they pay their tax bills in bitcoin?
The short answer is “no”, but that doesn’t mean you can’t get help understanding your tax-reporting requirements for cryptocurrency investments.
“The IRS issued guidelines in October on cryptocurrencies for the first time since 2014 and, basically, they view cryptocurrencies as an investment,” says Lisa Green-Lewis, CPA and tax expert at TurboTax.
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Like any asset investment, the tax considerations are similar for cryptocurrencies.
“For instance, if you hold onto cryptocurrencies as an investment, you’ll have a capital gain or loss,” Greene-Lewis says. “Or, let's say a taxpayer is getting his or her wages paid in cryptocurrency. If so, it belongs on your IRS W-2 tax form, it's included as income.”
Greene-Lewis says TurboTax has designed a premier tax product to help out with cryptocurrencies.
“We’ve made it really easy for people to figure out their crypto gains and losses for tax purposes,” she says. “If you’re doing tons of transactions in the cryptocurrency market, we’ve made it so you don't have to manually enter asset transactions to figure out what their gains and losses.”
“Basically, crypto users can import over 2,000 transactions at once into TurboTax and it will automatically figure out the taxpayer’s gains and losses,” she adds. “We’ll also work with investors on most cryptocurrency platforms, like Coinbase and others.”
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