March 5th, 2019
Image Source: caio_triana
It might be enough of a blow to have to pay taxes at all on your cryptocurrency gains: adding in a CPA’s fees may feel like a step too far.
While cryptocurrency taxes aren’t super-complex, you may well feel more confident getting the advice of a trained professional… especially if they’ve dealt with cryptocurrencies before.
If you actively enjoy the process of working with figures and forms, though, then maybe it’s worth considering becoming a CPA yourself. You’ll enjoy a strong average salary, which could help balance out the volatile nature of cryptocurrency investment.
Assuming you’re not looking for a whole new career path, however, there are a few things you should consider when deciding whether or not to hire a CPA to help you calculate your cryptocurrency taxes:
If you’ve only made a small amount on cryptocurrencies, then you may well be in a position where you can calculate your tax yourself.
“Crypto is simply treated as a form of property in the eyes of the law. This means that you calculate your taxes for cryptocurrency transactions in the same way you would for any other piece of property, be that stocks, real-estate, gold, or your car. When it comes to how to report cryptocurrency on taxes, you need to list all of your trades on the IRS form 8949, and then transfer your total gains to your 1040 Schedule D. This is the same process you take for trading stocks.”
If you’re already used to filing your own taxes, or if you invest in stocks or real estate, then you might feel fairly confident accounting for your tax liability and filling in the forms yourself.
While some CPAs have worked extensively with cryptocurrency, others won’t be particularly familiar with it. In fact, they may know even less than you do, if you’ve been in the cryptocurrency world for a while.
If you do decide to get a CPA to help you, make sure they’ve got a track record of dealing with clients whose assets include cryptocurrency. Some firms specialize in cryptocurrency, so make sure you turn to one of these to ensure you’re getting sound advice.
While you might well be in a position to calculate your taxes yourself, a good, knowledgeable CPA could help you drastically reduce your tax liability.
If you’ve made a fairly significant amount from trading cryptocurrencies, or if you have a lot of money held currently in a cryptocurrency, getting professional advice might dramatically reduce your tax bill.
Ultimately, while it’s possible to calculate your cryptocurrency taxes without consulting a CPA, if you’re making more than a few thousand dollars from cryptocurrency, you’ll probably find that it’s well worthwhile to get advice from a professional accountant.
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