Are you ready for crypto tax season? CoinTracking, as one of the best crypto tax software in the market, is here to help you prepare for a new tax season and be aware of all the key dates.
In this guide, we’ll give you our top tips to prepare for your crypto tax season and highlight the main dates and crypto tax forms that you need to fill out.
Let’s dive in.
In this article:
When do I have to file crypto taxes 2023?
According to the IRS, the key dates for the 2023 crypto tax season are the following:
January 23, 2023: The first date that the IRS starts accepting new tax returns for the 2023 season.
April 18, 2023: The final date to file for an extension or to file a tax return and pay the owed taxes regarding your crypto activity in 2022.
October 16, 2023: Last date for taxpayers to file their crypto tax return if they’ve asked for an extension before April 18, 2023, the original filing due date.
Do I need to report Cryptocurrency on my taxes?
Yes, you need to report every gain/loss of your crypto trades during each tax year.
You’ll need to report the capital gains/losses on the trades and all of your crypto income from 2022 (between January 1, 2022, and December 31, 2022) on this year’s tax return.
Do you have to report crypto gains to IRS?
Yes, in the US, trading cryptocurrencies for other cryptocurrencies or FIAT are taxable events, subject to capital gains taxes.
You’ll have to determine the gain/loss on each trade, and depending on the holding period, you’ll be taxed between a short and long-term capital gains tax rate, ranging from 0% to 37%.
How do I report crypto income?
In the US, crypto income like airdrops, hard forks, staking rewards, or crypto interest is taxed at the income level.
Every time you receive such a reward, you have to determine the Fair Market Value (in USD) at that time and report that in your US Individual US Tax Return.
How to report crypto on taxes
Crypto investors have a few reporting steps for the 2023 tax season:
Answer “Yes” to the crypto question on Form 1040 if they traded cryptocurrencies.
Report all capital/gains losses on Form 8949 and Schedule D of your Form 1040.
Report all of their crypto income in the US Individual tax return (Schedule B for interest and Schedule 1 for miscellaneous income).
Check this guide on how to fill out the right tax forms for your crypto.
Top 3 tips to prepare your 2022 crypto taxes
Here are the top 3 tips for crypto investors to have a smooth crypto tax season in 2023:
Use crypto tax software: Use a crypto tax tool such as CoinTracking to track your trades and income, calculate the gains/losses, and generate pre-filled tax returns.
Pay special attention to NFTs, DeFi income, and staking, as not all crypto tax tools are fully prepared to handle it and may cause wrong values in your crypto taxes. The best tip is to track all of your crypto activity as you go along and do weekly updates in your tax tool.
Search for professional tax help: Work with a crypto accountant to clarify doubts and make amends to any potential issue you may have with your returns. This will save you time and money in the future. Check how CoinTracking Full Service in the US can help you with this.
The best crypto tax software: CoinTracking
The best crypto tax software in the market is CoinTracking.
You can import your trades using CSV or API, track your gains/losses, and generate tax reports according to your preferred accounting method.
CoinTracking is your full crypto tax solution for:
DeFi and NFT support with our ETH+DEX importer.
Importing your Binance Chain, Binance Smart Chain, and MATIC transactions.
25+ advanced reports, including which coins offer you a tax-free rate.
Automatic capital Gains, according to 12 accounting methods (e.g., FIFO, LIFO, HMRC, ACB), accepted worldwide.
Generating complete Tax Reports in your country.
Moreover, CoinTracking can easily classify all your earnings from yield farming, liquidity pools, crypto staking, and much more.
Crypto taxes with no errors: CoinTracking Full Service in the US
CoinTracking also offers a Full Service for US traders. A crypto reconciliation tax expert from Polygon Advisory Group, a leading US crypto tax firm, will review your CoinTracking account, help fix any errors, and ensure you submit your crypto tax reports error-free.
Do you have any crypto tax questions? Check the best guides:
How are rebase token protocols taxed?
Do you pay taxes on fan tokens?
Do you pay taxes when trading stablecoins?
How is Yield Farming Taxed?
DeFi Taxes: The Complete Guide.
How to save taxes with a Bitcoin IRA.
Do you pay taxes for receiving Bitcoin tips?
Uniswap Taxes Guide
How to calculate taxes with Bitcoin dollar-cost averaging?
FIFO for crypto taxes? Implications of accounting methods.
NFT Taxes: The Complete Guide.
Is Bitcoin taxable? The ultimate guide for 2021 taxes.
This post is part of the Crypto Taxes AMA series. Follow our weekly AMAs on Twitter where our expert CPA, Sharon Yip answers your crypto tax questions. You can download 35+ AMA crypto tax reports for free.
Disclaimer: All the information provided above is for informational purposes only and should not be considered as professional investment, legal, or tax advice. You should conduct your own research or consult with a professional financial advisor when investing.