Cryptocurrency and Taxes: Do it Right with TaxBit
Did you use, buy, sell, or acquire crypocurrency this year? If so, you might (or might not) be wondering how it affects your tax return. If this is all news to you, TaxBit has you covered.
Cryptocurrency has become a major part of the technology driven world we live in. Although it has been around for ten years or so, it has recently become a more relevant and every day form of currency. Because cryptocurrency is bought, sold, and traded, much like stocks or other commodities, it requires tax laws and guidelines- and this is where things get tricky. Luckily, we’ve got tax automation software like TaxBit to help navigate those issues.
Founded by Austin Woodward, a CPA who has worked in the industry for some time, TaxBit came from a fascination with cryptocurrency. While doing his own taxes, Woodward realized it took way too much time and effort to figure it all out and report it. He knew the problem would only grow, and that software would be the answer. Woodward found the right people- CPA’s, tax attorneys, and software developers, and after starting work in 2018, launched product in January 2019.
Referred to as the “TurboTax of crypto”, TaxBit’s cloud based software automates the tax compliance process, handling all the back-end complexities that come with cryptocurrency. TaxBit also offers tracking, analytics, and personalized tax rates so you know where you're at throughout the year.
TaxBit has recently announced a $5 million seed round with a large group of solid investors including TTV Capital, Valar Ventures, Dragonfly Capital Partners, Collaborative Fund and Winklevoss Capital, and generalist investors Global Founders Capital, Table Management, Album VC. This will enable TaxBit to stay ahead of the game in an industry that is somewhat new but changing and evolving at a rapid pace.
“It’s important that people know that tax compliance is taken very seriously by the IRS. It’s something people need to properly report, and since cryptocurrency is relatively new, it’s important that it’s being done right.” said Woodward. “People are buying cryptocurrency, they’re using cryptocurrency as means of payment, they’re using it to get more cryptocurrency- they’re doing all sorts of things with it. Because of that, there are more taxable events that software is required to detect and automate for people. That’s what TaxBit is here for.”
The IRS has been vocal in the last few years as to properly reporting cryptocurrency taxes. In Fall 2019, the IRS released new cryptocurrency tax guidance, and also added a new question to the 2019 tax return form regarding acquisition, sales, or exchange of cryptocurrency during the taxable year. There has been a definite shift in the way Americans view cryptocurrency, and TaxBit has risen to the occasion.
To learn more about TaxBit’s recent funding or software products, visit taxbit.com