Must-read Crypto Wallets Guide for Beginners.Best Cryptocurrency Exchanges – Top 7 Picks.How to Invest in Crypto? Complete Beginner’s Guide.Some crypto tax calculators even allow users to trade from within the app after integrating their crypto exchanges using the software’s API.Īfter keying in all the important information, the software completes the calculations, and then you follow the directions to submit the tax returns. Once this is done, you can preview the capital gains or losses, calculate your taxes automatically, and even auto-generate and download your tax documents. You may also need to fill out information regarding unemployment compensation and social security benefits where applicable. Other important details include the form 1099-G, which shows refunds, credits, receipts from business or additional income documentation, and offsets of state and local taxes. You’re also required to include your social security number, W-2 forms from employers, and any other 1099-INT forms which show the interest paid from the previous year. Taxpayers who don’t know how or which software to use can utilize the IRS wizard to pick one and proceed according to the instructions provided.Īs a taxpayer, you need to provide the required information on the calculator, including your name, e-mail address, adjusted gross income for the last year, and your (or dependents’) IRS electronic filing PIN. The IRS allows users to select their e-file software programs on the website by following an official process. Generate reports, download tax documents, and seamlessly file your tax returns.Preview your capital gains and losses on your crypto events.Connect your blockchain wallets using public keys.Add your crypto exchange accounts to the calculator using Application Programming Interface (API) or Comma Separated Values (CSV) files.To get started with a crypto tax calculator, the following four steps are important: The software works automatically and even fills some fields on tax documents while the user can fill in other information manually. Crypto tax software tools allow users to integrate their crypto exchanges and wallets so they can pull their transaction data and history from there. When used correctly, crypto tax calculators can help reduce labor requirements and minimize the time spent in filing tax returns. The calculator then either gives the information to the user or automatically fills up the tax documents with the data for purposes of filing tax returns. How a crypto tax calculator worksĬrypto tax software calculates gains and losses derived from different crypto events, which the IRS considers taxable. In essence, a crypto tax calculator simplifies the process of calculating and filing tax returns. Anybody that sells any cryptocurrency, exchanges it for another digital asset, or uses it to buy a commodity or service must report the transaction to the IRS for possible taxation.Ĭrypto tax calculators are designed to help users understand their crypto taxes better while automating and optimizing their bookkeeping processes to ensure compliance with the tax regulations in their respective states or countries. The IRS taxes cryptocurrencies as intangible assets, just like stocks or bonds.
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