Tax seasons will be here before you know it. If you've been dealing in cryptocurrency, now's the time to hire a crypto tax attorney. If you've never used a tax attorney before, you might not think you need one. That's not the case though. This is especially true with regard to cryptocurrency. Cryptocurrency creates tax problems that can get tricky. This is especially true if you're not prepared. That's where a crypto tax attorney comes into the picture. Read the list provided below. If you're dealing with any of the issues described below, now's the time to hire a crypto tax attorney.
You've Gifted Cryptocurrency
If you've given cryptocurrency to someone, you need tax guidance. Many people think that cryptocurrency is a great thing to gift people. It is. But, it does come with its own tax issues. Cryptocurrency gifts don't work like your typical cash gifts. Instead, cryptocurrency gifts get treated like stocks and bonds for tax purposes. That means there's a limit on the amount you can give. If you go over the limit, you'll owe taxes on the gift. The gift recipient will owe taxes too. A tax attorney can help you sort out the details.
You Haven't Documented Your Cryptocurrency Earnings
Cryptocurrency doesn't get deposited into banks. That makes many people think that money is not tracked by the IRS. That's not the case though. Besides asking you to self-report on tax forms, the IRS has other ways to track crypto earnings. One way is by monitoring broker records. That's why you need to report all your crypto earnings. If you haven't, now's the time to hire a crypto tax attorney. They can help you document what you've earned.
You Haven't Paid Taxes on Your Earnings
If you haven't paid taxes on your crypto earnings, you need a tax attorney right away. Once your earnings get discovered, there's a good chance you'll get audited by the IRS. If that happens, you could owe penalties and fines for your back taxes. Before that happens, hire a crypto tax attorney. They can help you avoid audits. They can also help you get back on track with your crypto taxes.
You've had a Loss on Your Cryptocurrency
If you've suffered a loss on your crypto earnings this year, you're not alone. Many people have lost money on their crypto investments this year. Luckily, you can claim those losses on your taxes. But, you need to hire a crypto tax attorney right away. A tax attorney can help you navigate this process.