Navigating Cryptocurrency Taxes: What You Need to Know for the 2019 Tax Season

Understanding the IRS’s New Focus on Cryptocurrency

As we dive into the exciting world of taxes and cryptocurrency this season, it’s no wonder the IRS is showing some newfound interest. It’s almost like they threw their hands up and said, “Why not?” According to a recent report from Bloomberg Tax, the IRS is calling upon cryptocurrency companies and advocates to gather for a summit in Washington D.C. on March 3rd. You know when the IRS throws a shindig, they mean business—but don’t bring your party hats!

The Summit Details

This summit isn’t just a casual meetup with coffee and donuts. The IRS has serious goals up its sleeve: to figure out how to juggle taxpayer service with the ever-important regulatory enforcement. Topics on the table include:

• Regulatory guidance and compliance
• Preparing your tax returns correctly
• Exploring the challenges cryptocurrency exchanges face
• Buzzing technology updates

With each panel lasting 90 minutes, attendees can expect plenty of insights from both government and private sector speakers. Forget PowerPoint; this is the Super Bowl of tax talk!

How to Declare Your Cryptocurrency

So, what does all this mean for you, the average crypto enthusiast who may or may not know how to operate a calculator? By the 1040 form, this year’s tax return comes with a twist: a question about virtual currency. No pressure here, folks!

Step-by-Step Guide to Reporting

1. Gather Information: Collect transactions from your wallets and exchanges. Yes, all those mishaps trading Ripple and Bitcoin—you’ll want a detailed history.
2. Calculate Gains and Losses: Follow the cost basis method, which is just a fancy way of saying calculate how much you earned or lost. Trust me, this sounds harder than it is—and it’s a good excuse to revisit those stubborn spreadsheets!
3. Complete Your Form 1040: Find the special section related to virtual currencies and answer truthfully because the IRS has a knack for finding out the truth faster than your ex.

And voilà! You’re on your way to filing that tax return without feeling like you just explain a complex algorithm to your pet goldfish.

Conclusion: Playing It Safe

As the IRS maintains its vigilant watch over cryptocurrency holders, it’s crucial to stay informed and compliant. Don’t let the tax season sneak up on you—being proactive today may save you drama tomorrow. So, grab your inner accountant and let’s tackle those taxes like the pros we aspire to be!