Use KOINLY for easy crypto taxes: https://koinly.io/?via=E72819FA

Crypto taxes are an absolute nightmare - unless you use a software that automates it for you. Here's how to do cryptocurrency taxes using the best crypto tax software!

00:00 - Intro
0:46 - TaxBit (Free Crypto Taxes)
2:28 - Koinly (Advanced Crypto Taxes)
5:46 - Crypto Tax Tips
6:16 - Crypto Capital Gains
8:56 - Crypto Income Taxes
9:39 - Crypto Expenses (Deductible)
10:08 - Non-Taxable Crypto Events
11:07 - Watch This Next

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Last year, I used several crypto exchanges, a few crypto interest accounts, multiple DeFi platforms and mined cryptocurrency, so as you can imagine, I’ve been absolutely dreading the thought of tax season.

Luckily, I found a solution that automates all of my cryptocurrency taxes and offers every document I could ever need to file my taxes properly. I’ll start by walking you through a completely free solution called TaxBit, which should be enough for most casual investors. Unfortunately, I needed something a little more advanced, and found Koinly to be the best crypto tax solution for that. Finally, I’ll break down some basic crypto tax rules because I think there are a lot of misconceptions out there. This way, you’ll have a much better idea of what to expect when you file your return.

There are four broader tax treatments that every crypto activity falls under. These are first capital gains or losses, which are further divided into short term and long term categories. There is also income, expenses and a non-taxable category. I’ll break down each of these in detail, but now’s a good time to say that I am not a tax professional and you should definitely consult with one if you need tax advice.

First up is capital gains and losses. You realize capital gains and losses, and therefore create a taxable event, anytime you sell cryptocurrency, buy something with cryptocurrency or trade from one cryptocurrency asset into another.

Moving on, we’ve got crypto events taxed as income. There are no cost basis calculations for these events, the full amount will be taxed at your income tax rate, so again between 10 and 37%. This category includes a lot, such as coins received from airdrops, forks, mining, staking, liquidity pools and similar sources. It also includes any interest you earn on cryptocurrency from apps like Celsius or BlockFi, as well as any referral bonuses. Also, this shouldn’t be much of a surprise, but if you get paid in crypto for selling a product or doing work online or anything, it will also be taxed as income.

Next we’ve got the expense category, which won’t be taxed, and may actually be tax deductible, meaning you can deduct it from your gains or income. However, it should be noted that not all crypto expenses are clearly outlined by the IRS, so you should consult a tax advisor if you want to make full use of this.

Finally, we’ve got the coveted non-taxable category. My favorite here is proceeds from crypto-backed loans. This is a really great tax strategy where you can take out a cash or stablecoin loan by locking up your crypto as collateral. With it, you can take some profits out of your portfolio without owing taxes on the gains, which would happen if you sold it.

#Crypto #Taxes #TaxTips

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This video is meant for informational purposes only, and is not a recommendation to buy or sell any security or cryptocurrency. It is also not a research report and should not serve as the basis for any investment decision. Additionally, I earn commissions for purchases and sign-ups made through the links above.