At the beginning of 2018, I wrote an article outlining a New Year’s resolution that I thought could help boost cryptocurrency adoption and awareness in 2018, as long as enough people were doing it. Last week was the twelfth installment of my challenge. Since then, I’ve filed my taxes – which required an at-length conversation with a tax professional about cryptocurrencies – and I realized just how insane the current tax code in the US is for cryptocurrency.
TRY TO SPEAK TO AS MANY PEOPLE ABOUT CRYPTOCURRENCY AS YOU POSSIBLY CAN
As we all know, every time you use a cryptocurrency in the US, it is considered a taxable event, so every transaction needs to be reported. Not only is this annoying, but the IRS has provided little clarity on the matter, and many tax professionals are left baffled when people like me come into their offices.
- This year, I chose to have someone else review my taxes prior to sending them in, just to be sure. However, it became apparent once I started presenting my Form 8949 worksheet that they didn’t really know how to handle it. “Are you a day trader?” was something multiple people in the office asked me. They didn’t understand why a brokerage had not provided me with a consolidated 1099 for these “trades”, and I had to repeatedly explain the P2P nature of cryptocurrency. In the end, we worked it out, but I left realizing just how much more work cryptocurrency communities need to do in both educating people and pressuring governments for more sensible cryptocurrency tax policies.
- I work out of a WeWork every now and then. I ran into some of the community managers there (they take care of the building and plan events for members) who asked what exactly cryptocurrency was. They had heard so much about it recently, but were mostly focused on the price – and its recent correction. Again, much of my conversation was focused on shifting the crux of the discussion to the technology and away from the price. They ended up being really impressed by the idea of responsibility being placed back on the individual. I ended up sending them a link to Andreas Antonopoulos’s YouTube channel so they could watch someone more eloquent than myself explain it further.
LEARN SOMETHING NEW ABOUT CRYPTO
This week, I learned about a delightful program to make reporting taxes on crypto really easy. I used bitcoin.tax and it actually gave me a lot of really interesting insights into my cryptocurrency activity this past year, in one consolidated place. Not to seem like I’m shilling it (I promise this isn’t paid promotion, I’m just a data geek), it was really interesting to get this kind of breakdown, and know that I can access these reports next year too. Again, hopefully the IRS will adopt more reasonable tax laws such that we won’t need things like bitcoin.tax to report Dogecoin dust transactions.
BE GENEROUS – GIVE AND USE YOUR COINS
This week I gave away the paper wallet of Doge that I’d received from the Shibe Mint (from which I bought some physical, precious metal Dogecoin). It wasn’t much, but I think I’m just exhausted from the idea of having to report many transactions next year on my taxes. I think this fatigue will pass soon, though.
Did filing crypto transactions on your taxes also take a bit out of you? Otherwise, how goes your challenge? Tell us on Twitter or in the comments below!