Crypto Tax Attorney: What You Need To Know?

Tax season is fast approaching, and this time, your crypto gains are coming with it. If you’re a crypto investor, you need to be aware that the IRS expects its cut of your digital currency profits. Even though the subject of reporting virtual currencies on tax returns has been debated for several years now, most people aren’t prepared for this latest development. 

There are plenty of articles and blog posts out there that explain how to report your crypto transactions on your taxes; however, very few go into detail about why you should secure legal counsel. Let’s take a look at some of the key benefits that come with hiring a crypto tax attorney in case you find yourself in need of one.

Who Should Hire a Crypto Tax Attorney?

If you have any doubt about your ability to file taxes correctly, you should hire a professional to help you. Crypto users who fail to report their gains and losses with the IRS run the risk of very hefty fines. If you made any significant gains on your crypto trades or investments last year, you’re required by law to report them on this year’s taxes. 

However, very few people understand how exactly they should go about doing so, which can make the process a lot more confusing than it needs to be. Hiring a crypto tax attorney is the best way to ensure that you file your taxes correctly and avoid any unnecessary fines. Unlike accountants, crypto tax attorneys specialize in the reporting of digital currencies. 

They understand the nuances of reporting crypto gains and losses, which is something that most accountants simply don’t know about. Hiring an attorney who specializes in crypto tax law is your best bet if you want to be sure that everything is reported correctly.

How Does a Crypto Tax Attorney Help?

Since the IRS expects you to report your cryptocurrency trading gains, it’s likely that many people will be hiring crypto tax attorneys in the months to come. If you’re one of them, you’ll want to know how exactly an attorney can help you with your taxes. The first thing that an attorney will do for you is to walk you through the entire process of filing your taxes. 

Since you’re probably not an accountant or a tax expert, you might feel overwhelmed by the process of filing your taxes. An attorney can help you with the entire process, from understanding the law to filing your taxes correctly. 

An attorney can also help you resolve any issues that may arise as you file your taxes. If the IRS flags a transaction or claims that you didn’t report it correctly, your attorney will help you make your case and prove that you reported everything correctly.

What Information Do You Need to Report?

The first thing that you need to do is to determine how much money you made from your crypto transactions. You can do this by calculating the net gains and losses from each trade. You then add all of your net gains and subtract all of your net losses to get one final number. This is the amount of money that you made from your cryptocurrency transactions last year. You then need to report this number on your taxes. Here are the different types of things that you need to report on your taxes: 

1. The amount of money that you made from your crypto transactions.
2. The amount of money that you spent on buying and selling your cryptocurrencies. This includes the cost of purchasing your mining hardware and electricity costs.
3. Any hardware, software, or other equipment purchases that you made to support your mining activities, if applicable.
4. Any mining pool or other fees that you paid to support your mining activities.

It’s understandable if you’re not clear on these things. But that’s why hiring a crypto tax attorney is the smart move. They can guide you throughout the tax filing process to ensure that you include all necessary information related to your crypto assets.

How to Calculate Your Crypto Taxes

If you’ve made money from investing in cryptocurrency, you may be wondering if you need to pay taxes on your earnings. The answer is maybe – it depends on a few factors, including how much money you’ve made and what type of crypto assets you own.

In general, though, any profits you make from selling crypto will be subject to capital gains tax. This means that if you’ve bought crypto for $1,000 and sold it later for $10,000, you’ll owe taxes on your $9,000 in capital gains.

The exact amount of tax you owe will depend on your tax bracket. For example, short-term capital gains get taxed at higher rates than long-term capital gains. What’s more, if you’re in the 10% or 12% tax bracket, you may not owe any capital gains tax at all.

To calculate your crypto taxes, you’ll need to keep track of all of your crypto purchases and sales. This can be a daunting task, but there are a few software programs that can help you automate the process.

Once you have all of your data collected, you’ll need to fill out a Schedule D form and report your capital gains (or losses) to the IRS. If you have any questions about how to do this, we recommend speaking with a tax attorney or accountant who specializes in cryptocurrency taxation.

Call The Law Office of Mary King to Speak with an Experienced Crypto Tax Attorney

When it comes to cryptocurrency and taxes, there is a lot of confusion. Many people are not sure if they need to pay taxes on their earnings or how to calculate the amount they owe. Thankfully, crypto tax attorney Mary King can help. She will work with you to determine your tax liability and help you file your return correctly.

If you would like to learn more about cryptocurrency taxes or speak with an experienced tax attorney, contact The Law Office of Mary King today.

Call: 941-906-7585
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The information in this blog post is for reference only and not legal advice. As such, you should not decide whether to contact a lawyer based on the information in this blog post. Moreover, there is no lawyer-client relationship resulting from this blog post, nor should any such relationship be implied. If you need legal counsel, please consult a lawyer licensed to practice in your jurisdiction.