Cryptocurrency Filing: A Dismal Overview
In an astonishingly low turnout, only about 0.04% of taxpayers using the personal finance service reported cryptocurrency transactions to the IRS this filing season. This translates to fewer than 100 individuals out of a whopping 250,000 who filed through Credit Karma. And you thought your social media posts were underappreciated!
Why So Few? The Tax Filing Conundrum
Jagjit Chawla, the General Manager of Credit Karma Tax, noted that the low numbers weren’t entirely unexpected. Complex tax scenarios often lead to procrastination, pushing these taxpayers to file later in the season. It’s like a game of tax chicken. The kicker? Given the cryptocurrency boom of 2017, one would anticipate a larger uptake in reporting. Did everyone just forget about their crypto fortune?
The IRS Stance: Cryptocurrency as Property
The IRS has solidified its stance on cryptocurrencies by categorizing them as property rather than currencies. This legal designation means that every transaction—be it buying, selling, trading, or mining—counts as a taxable event. In layman’s terms: if you swap crypto for a pizza, Uncle Sam wants to slice of that pie!
The Argument for Currency Treatment
Independent trader Brandon Williams argues this property classification complicates things unnecessarily. He suggests that treating cryptocurrencies like traditional currencies could pave the way for broader acceptance. Who has time to jump through legal hoops when you’re just trying to buy that digital cat your friend keeps talking about?
Paperwork Headaches: The Burden of Reporting
The challenge of keeping track of myriad transactions is a legitimate concern. Williams reveals that with frequent trading—sometimes more than two a day—he often finds himself dedicating hours just to log his gains and losses. It’s almost like they’re trying to make trading crypto a cardio workout! Who knew staying fit would also require a good grasp of tax codes?
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