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PR: Cancel the Crypto Loss with CoinTracking.info

Cancel Crypto Losses with CoinTracking.Info

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Last Thanksgiving, Bitcoin was in the middle of a bull run that would end with a record of $ 19.511 before Christmas. Now, Bitcoin is worth only $ 3,752.

If you bought Bitcoin and other encrypted ones when their prices were high, now there is a positive side to the state of the encrypted markets: any loss you take this year could put you in a lower tax bracket. Furthermore, claiming such losses is easier than one might suppose.

For taxation purposes, the United States and most other governments regard cryptocurrencies as an asset. This means that every time you trade the cryptocurrency, the transaction falls into one of these two categories: a capital gain or a capital loss.

Capital Gain: A capital gain occurs when you sell cryptocurrency for an amount greater than the amount paid to purchase it.
Loss of capital: if you sell cryptocurrency for an amount less than the amount you paid, this is considered a capital loss.

You must sell or buy an asset to trigger a taxable gain or loss. Once you decide to make a move, the tax authorities consider the "realized" loss. If your loss is big enough, you might be able to use it to get into a lower tax band.

One of the biggest benefits of claiming a loss is that you can offset income earned from other sources.

In the United States, IRS allows you to deduct up to $ 3,000 in net loss each year from the amount of money earned in your daily work. If the amount you lost is more than $ 3,000, you can get another deduction of up to $ 3,000 when filing taxes next year.

If you currently earn just over $ 50,000 a year in your job, that $ 3000 cryptocurrency loss could put you in a lower contributory bracket. This could result in thousands of dollars in tax savings.

Furthermore, if you have earned some income through shares or through the sale of property, there is no limit to the amount you can deduct from such income.

If you are in the $ 38,701 – $ 82,500 range and your capital loss encryption takes you below $ 38,700, you will only have to pay $ 952.50 plus 12% of any amount over $ 9.525. But if you made $ 38,701 or more, you'd have to pay more than four times in taxes plus 22% of any amount over $ 38,700.

In other words, if you can not deduct the crypto losses and you fall into the third bracket accordingly, you should pay at least $ 4,453.50 to the IRS. But if you archive your losses and make a second parenthesis, you will only pay $ 952.50.

Total tax savings: $ 3,501.50.

If you are married and you expose yourself jointly or widowed, moving to a lower tax bracket may result in additional tax savings. If you earned $ 77,402 in 2018, you should pay IRS $ 8,907 and change.

Lowering the $ 19,051- $ 77,400 tax bracket by archiving a crypto-loss would save you $ 7.002.

In addition to cryptocurrency traders, cryptocurrency miners can use deductions to reach the lowest tax rates.

A notice that the IRS published in March 2014 provides some relevant details:

"… when a tax payer successfully" pulls out "virtual currency, the fair market value of the virtual currency on the date of receipt is included in the gross income."

If the value of the cryptocurrency you extracted decreases and you decide to sell it, this would mean that you have activated a loss of capital. You can report this loss in the same way you would if you had bought and then sold your coins through an exchange.

IRS analysts told CNBC that the costs of electricity and other expenses could also be amortized.

Understanding how much you've done or lost can be a headache, particularly if you have not tracked your purchases or if you've made a huge amount of business orders last year.

The ordering of how much you lost or earned requires access to historical price data. Without those historical data, you will not be able to determine what the price of your crypto asset was when you bought and sold it.

Fortunately, software is available that can crunch all of your encrypted tax data for you.

With CoinTracking.info you can import your transactions from all your wallets and cryptocurrency exchanges. The interface guides you through how to make imports.

At the end of the import process, you can download the IRS 8949 form. This is the form you must submit to report your loss.

Other download options include CSV, TaxACT and TurboTax.

If you use a cryptographic tax calculator to make your taxes, tax filing is a simple process. All you have to do is take the total from the IRS 8949 form and transfer it to the 1040 module of the IRS Schedule D.

In fact, most CPAs that work with cryptographers use CoinTracking and other publicly available software to determine what their customers need. These tools are not difficult to use. Many have free trials, which allow you to see how they work for you before committing yourself.

If you lost money in the encrypted markets last year, you may be able to offset some or perhaps even all of those losses at the time of tax. Reporting capital losses could help you move to a lower level of contribution. If your deductions qualify you for a lower range, storing them could save you thousands of dollars when you send taxes this year.

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This is a paid press release. Readers must exercise due diligence before taking any action relating to the promoted company or its affiliates or services. Bitcoin.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use or reliance on any content, goods or services mentioned in the press release.

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