TaxBit seeks to make the filing process easier for digital currency merchants in the US Customers of partner platforms will be able to access the tax form for free.
Some of the major digital asset exchanges have partnered with the accounting firm taxbit to make the crypto tax filing process easier for United States taxpayers.
According to several news outlets, the company launched Tax Bit Network, a network that allows cryptocurrency users to connect accounts from various trading platforms for the purpose of generating a unique transaction history when filing taxes.
In the US, taxpayers who operate with digital currencies must file ‘Form 8949’. This document shows the history of transactions with cryptocurrencies before the Internal Revenue Service (IRS). The filing requires taxpayers to disclose the date of acquisition, sale or disposition of their crypto properties, as well as the revenue and costs of each transaction. This allows calculating the gains or losses to be declared for each transaction.
TaxBit wants to facilitate crypto-tax returns
As a result, this process has historically been cumbersome, confusing, and often costly for cryptocurrency users. Austin Woodward, co-founder and CEO of TaxBit in interview with CoinDesk. Especially for those users who trade across multiple trading platforms and may collect several hundred or even thousands of transactions per year.
According to Woodward, annual tax filing costs run into the thousands of dollars for many cryptocurrency holders. He added that the goal of the new software it is to democratize and demystify the process while making it more accessible, both in terms of cost and ease of filing.
As part of the initiative, users of the platforms associated with Tax Bit Network will be able to receive 2021 tax forms for free. In addition, several of the participating exchanges will incorporate a quick registration of TaxBit within your applications to simplify access to tax reporting tools.
Coinbase, Gemini, Binance and others among the partners
The accounting firm hopes that your initiative remove one of the barriers to widespread adoption of cryptocurrencies while making tax filing easier. Also, its CEO says he hopes the network will help close the much-discussed “tax gap“. The US IRS has attributed this “gap” to undisclosed cryptocurrency capital gains.
“Our belief is that it is not because the crypto community is deliberately trying to evade taxesWoodward said of the tax gap. Instead, it is because “It’s been too costly and too complicated to understand”.
Leaders of some of the exchanges agreed with the initiative, highlighting the need for compliance. Among them, the CEO of Binance.US, Brian Shroder, noted that the company’s involvement in Tax Bit Network it’s a crucial step in your commitment to security and compliance.
Also the CEO of Gemini, Tyler Winklevoss, added in that line: “Compliance is a key pillar at Gemini and proactively providing our investors with access to tax reporting tools helps our clients stay on top of their cryptocurrency tax obligations as regulation continues to evolve.“.
Article versioned by Hannah Estefanía Pérez / DailyBitcoin