TurboTax Online is now the crypto tax authority, offering the most complete import coverage, including the top 15 exchanges. Whether you invest in cryptocurrency through Coinbase, Robinhood, or another exchange, TurboTax Online can help you import and understand cryptocurrency taxes just like any other investment.
TurboTax Premier can handle your stock, bond, ETF, cryptocurrency, rental property income, and other investments. Filers can quickly import up to 10,000 stock transactions from hundreds of Financial Institutions, as well as up to 4,000 crypto transactions from the main cryptocurrency exchanges. While doing your taxes, you can improve your tax knowledge and understanding.
Do I have to pay cryptocurrency taxes?
Yes, if you traded in a taxable account or made money from activities like staking or mining. According to IRS Notice 2014-21, cryptocurrencies are considered “property” by the IRS and are treated the same way as stocks, bonds, or gold.
If you sold cryptocurrency, you would almost certainly need to file cryptocurrency taxes, commonly known as capital gains or losses. These will be reported on Schedule D and, if necessary, Form 8949. Separately, if you earned money as a freelancer, independent contractor, or gig worker and received payment in cryptocurrencies or for crypto-related activity, you may be self-employed and must submit Schedule C.
If you only purchased but did not sell cryptocurrency throughout the year, instead choosing to keep it in a wallet or on a crypto platform, you will not owe any taxes on the purchase. Similarly, you would not owe taxes if you purchased and held equities for your portfolio.
The tax consequence arises from disposing of it, whether through trading or spending it as cash. That’s true, making crypto purchases is a taxable event that you must disclose on your tax forms, just like selling stock and using the proceeds to buy anything.
You’ll need to maintain track of all of these transactions so that you can accurately calculate your tax liability on your tax return.
This activity is not taxable if you purchased, sold, or exchanged cryptocurrencies as an investment through a tax-deferred or non-taxable account. However, depending on the type of account, you may be taxed when you take money from it.
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