The Spodek Law Group is a premier, and well known, tax fraud law firm. We understand what the IRS is looking for, and most importantly understand how cryptocurrency works. We understand the challenges investors face when it comes to reporting their cryptocurrency trades to the IRS and the potential tax liabilities associated with not reporting it properly. Regardless of what the reason, or issue is, we’ll handle the IRS for you.
There are numerous scenarios where the transfer or payment of Cryptocurrency can be considered taxable income. For example:
These are some of the more basic and common examples where Bitcoin is considered taxable income. All income is subject to income tax even if your employer doesn’t give a W-2, 1099, or other tax document. In Notice 2014-21, the IRS announced the exact tax treatment cryptocurrencies will receive. Many people expected Bitcoin to be treated like other types of currency for tax purposes, but it wasn’t. Bitcoin and other currencies have to be treated as property for tax reasons. This is due to the fact that unlike traditional currencies, Bitcoin isn’t regulated or governed. As such, it’s treated like property. What this means is that the parties have to consider and account for gains which occur with Bitcoin. Failure to account capital gains can result in tax penalties. The failure to account for capital losses means you are paying more in tax than needed.
How should you account for cryptocurrency tax gains
Taxpayers should record the value of Bitcoin when they are bought, sold, transferred, etc. The difference in is capital gains/capital losses. This is recognized at the time of the transfer. It should be reported by completing Schedule D of the income tax return. This is then transferred line 13 of the individual tax return. Taxpayers should make sure to take account of capital gain and losses with cryptocurrencies. Failure to do so can result in tax penalties and interest accruing.
Some employers use bitcoin to pay employees or contractors. You have to make sure in this case that all employment and self-employment tax obligations are handled. Many employers and workers think that the form of the income can excuse them from payroll tax obligations. Employers have to withhold taxes for employees. Similarly, independant contractors have to make sure their self-employment taxes are paid. The failure to do so can result in fines and penalties.
Todd is a miracle worker who will work tirelessly for you and your family. He is one of the few attorneys i've met - who I earnestly trust to protect me, and who I am happy to refer to our friends and fellow family members. The Spodek Law Group is someone you want on your side, because they will treat you just like family. Todd and his team are available 24/7, and they always answered our calls. Even when we were being irrational, and crazy - they were calm and super helpful. Just call Todd. He gives you a free consultation and is very understanding.- Donna & Robert
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