Missouri-based software maker CryptoTrader.Tax has launched a new product facilitating cryptocurrency tax reporting.
As the 2019 tax year comes to an end, the software is designed to help firms, certified public accountants and professionals counsel their clients about reporting their taxes from crypto in accordance with the tax guidelines set out by the United States Internal Revenue Service (IRS). CryptoTrader.Tax announced the news in a press release on Nov. 25.
The new tool allows to auto-generate client’s tax reports
The newly released crypto tax professional suite by CryptoTrader.The tax provides a step-by-step process description for importing crypto transactions by clients, as specified on the website. The tool allows tax professionals to auto-generate client tax reports using transaction data imported into CryptoTrader.Tax, manage multiple clients and operate automated importing.
Since the IRS released its guidelines for crypto-based tax reporting in October, roughly 150 million American taxpayers will have to answer the question on Form 1040 whether they received, sold, sent or exchanged any virtual currency.
In the report, CryptoTrader.Tax stated that the IRS expects that roughly 12 million tax returns should contain some form of crypto investment.
CryptoTrader.Tax CEO: there’s an increased demand for automating crypto tax reporting
David Kemmerer, CEO and co-founder CryptoTrader.Tax, stated that the new question on 1040 means that all tax professionals not only have to ask their clients whether they had any crypto-related activities this year but also must be ready to handle crypto taxation for clients. Kemmerer noted that their crypto tax professional suite follows increased demand from tax professionals:
“We’re seeing that thousands of tax professionals are now looking for software tools to help them automate crypto tax reporting for their clients. We are excited to launch our crypto tax professional suite to provide a much needed solution for these professionals.”
According to the report, CryptoTrader.Tax already has thousands of users on its platform to date and has processed over $10 billion of crypto transactions over the past two years. The new software is free-to-use for tax professionals, the report notes.
0.04% of tax filers reported capital gains from crypto in 2018
On Oct. 9, 2019, the IRS issued its guidelines for crypto-based tax reporting. According to the new rules, U.S. persons are subject to U.S. tax in case if they hold, sell or exchange digital currency as well as if they receive digital currency in the form of salary or as a result of a hard fork. If U.S. people acquire digital currency as a gift, there is reportedly no immediate tax. The IRS has reportedly not decided whether promotional airdrops should be treated as taxable to date.
According to a study by Credit Karma Tax, data released ahead of the close of the preceding tax year indicated that just 0.04% of tax filers were reporting capital gains from crypto investments to the IRS. Meanwhile, the number of Americans who own crypto reportedly almost doubled in 2019, from 7.95% in 2018 to 14.4%, according to a new survey published in October.