California Accountant for Bitcoin and Cryptocurrency Tax Returns
Cook CPA Group
Bitcoin and cryptocurrency are highly popular for the many benefits they offer. However, when it comes to reporting taxes for cryptocurrencies, many investors are uncertain of their tax liability. As the tax code continues to change in regard to cryptocurrency tax reporting, it would be wise to seek help when calculating your taxes. If you need assistance to calculate your tax return income from cryptocurrency, you should consult with an experienced California accountant for Bitcoin and cryptocurrency tax returns.
At Cook CPA Group, our team of skilled accountants is ready to offer you their services to determine how Bitcoin and other cryptocurrencies may affect your tax returns for the year. We understand that cryptocurrency regulations can be difficult to understand, and we can help you figure out your tax liability. To schedule a free consultation to discuss your cryptocurrency tax reporting, contact Cook CPA Group at (916) 432-2218. You may also contact us online to schedule an appointment.
How Bitcoin and Cryptocurrencies Work in California
Bitcoin and other cryptocurrencies are considered as virtual currency. The Internal Revenue Service (IRS) defines Bitcoin and other cryptocurrencies as virtual currency, which is a digital form of currency that can be used as easily physical currency like coins and paper money. Cryptocurrencies like Bitcoin use complex codes to keep the currency, and all transactions secure using a digital ledger known as a blockchain.
Many investors use Bitcoin, Ethereum, Litecoin, Dogecoin, and many other types of cryptocurrencies for the many freedoms they provide. For example, cryptocurrency transactions between two individuals do not require a third-party financial agency to facilitate the trading of currency. Instead, the cryptocurrency can be directly traded to another party without the need for a bank or other financial institution.
However, the use of cryptocurrencies also raises concerns about tracking the trading and usage of these currencies. This makes it easier for users of cryptocurrencies to possibly avoid the paying of taxes. As a result, the IRS and many other tax agencies have introduced a number of tax regulations for cryptocurrencies.
Failing to comply with tax law regulations regarding cryptocurrencies can cause a number of issues for a taxpayer. Failing to file taxes or avoiding taxes regarding the buying and selling of cryptocurrencies can lead to a large tax bill or possibly even a tax audit. While our accounting firm can help you if you become the subject of a tax audit, it would be wise to comply with tax regulations to avoid the situation entirely.
To learn more about how cryptocurrencies are taxed, you should continue reading and speak with an experienced California accountant for Bitcoin and cryptocurrency tax returns.
Tax Laws for Bitcoin and Cryptocurrencies in California
When reporting to the IRS and other tax agencies, it is important to note that Bitcoin and other cryptocurrencies are treated as property holdings as opposed to being treated as cash as some taxpayers might expect. This means that for the purpose of filing tax returns, the IRS will treat cryptocurrency as a form of stock. As a result, many laws that apply to securities will apply to Bitcoin and other cryptocurrencies.
Reporting Bitcoin and cryptocurrency transactions require a taxpayer to be familiar with a number of tax code regulations. For example, since cryptocurrencies are a form of property holding, the capital gains tax will apply when income is earned from cryptocurrencies. Specifically, if a taxpayer earned a profit from the sale of Bitcoin, Litecoin, or another variety of cryptocurrency, they will be required to pay the capital gains tax.
To report earnings from cryptocurrencies, taxpayers should use a Form 1040 for individual returns or a Form 1040EZ for single and joint filers with no dependents.
It is important to note that Bitcoin and other cryptocurrencies no longer have to be reported under the foreign income tax procedures. The United States places a tax on all U.S. persons that receive income from foreign assets, bank accounts, and other similar accounts. This would mean that a U.S. taxpayer that held cryptocurrency in a foreign nation would have to pay taxes on that income. Fortunately, the IRS has currently done away with foreign reporting requirements for Bitcoin and other cryptocurrencies.
If you are unsure about how to calculate your tax liability for cryptocurrency, it would not be wise to attempt to handle this issue alone. The accounting team at Cook CPA Group already has vast experience handling cryptocurrency reporting issues, and we are dedicated to working with you to manage your tax liability.
The financial consequences for failing to properly report income from cryptocurrencies can cause you to experience a variety of tax-related issues. Let our firm look at your unique tax situation to determine how to approach payment for your cryptocurrency tax liability.
Work with Our Experienced California Accountant/CPAs for Bitcoin and Cryptocurrency Tax Returns
If you need the aid of an accountant to determine your tax liability for cryptocurrencies, you should contact our experienced Roseville accountants for Bitcoin and cryptocurrency tax returns. At Cook CPA Group, our accountants possess a wealth of experience handling Bitcoin tax reporting, and we would like the opportunity to help you meet your tax goals. To schedule a free consultation to speak about your tax situation, contact Cook CPA Group at (916) 432-2218. You can also reach the firm online.