TaxBit, a crypto accounting service, has established a network that allows users to link accounts from across the crypto ecosystem to generate transaction histories for tax reporting.
Crypto traders in the United States generate Form 8949 to show their transaction history for the year when filing with the Internal Revenue Service (IRS). The form shows transactions involving short-term capital assets, defined as assets held for less than a year. Every short-term transaction requires taxpayers to declare a description of the property, the date acquired, the date sold or disposed of, the proceeds, and the cost basis. This enables the taxpayer to calculate their profit or loss on each trade.
This might be a time-consuming operation for people who trade cryptocurrency on multiple platforms. For many traders, employing an accountant or purchasing software to go through the transactions on each site is the only choice. TaxBit is working to make the process go faster.
Customers can integrate data from more than 500 supported sources using the company’s TaxBit Network. Large centralized venues such as PayPal, Coinbase, Gemini, Binance.US, and FTX.US and decentralized finance (DeFi) and non-fungible token platforms such as Uniswap SuperRare, and Nifty Gateway, are among such companies.
Users link their accounts to their TaxBit accounts, which they may create for free through the network, and the company fills out a free Form 8949 for each venue linked by the taxpayer. The number of transactions or wallet addresses is unrestricted. Some organizations will even incorporate TaxBit sign-up buttons into their software.
Even without the added issue of the new and still-debated infrastructure bill crypto tax provision, the IRS is in for a rough tax season in 2022. The Treasury Department has warned that refunds may be delayed, and considerable backlogs are expected.