Taxes are inherently complicated. Add cryptocurrency to the mix, and it can get downright overwhelming.
If you’ve bought and sold Bitcoin, Ethereum, or any other crypto in 2021, you’ll be expected to report any profits to the IRS during this year’s tax season, which is officially underway. If all you did was buy and hold crypto last year, you might not owe anything. It’s when you get more active that it gets more complicated.
“What is tricky is that there are a lot of really crazy things with crypto that you can do, from all the stuff around DeFi to NFTs. That’s gonna be the hard part about 2021 taxes,” says Pat White, co-founder and CEO of Bitwave, a company that helps businesses with crypto tax reporting.
If you own crypto, or dabbled in it last year, you may be wondering if you can file your own taxes or need to bring in a crypto tax professional for some help. For many people who buy and trade crypto within online exchanges, accounting for it in your tax return is relatively easy.
“If all you’re doing is buying some Bitcoin, holding onto it and selling it six months later, then any CPA can help you with that,” says White.
Here’s how to begin preparing for tax season if you have crypto, tips for…
