Filing taxes has always been a headache. To be absolutely sure of including all the data, computing everything to the point, and calculating each figure correctly gets troublesome. It is only so troublesome in fiat money, can you imagine what it would be like to file cryptocurrency taxes? TokenTax made it easy to file crypto taxes.
Aren’t cryptocurrencies tax-free?
Yes and no. There are countries in the world which do not levy any taxes on the cryptocurrency that a citizen holds. These free crypto countries include Germany (where cryptocurrency and assets are considered to be private money), Denmark, Singapore (where crypto is neither a commodity nor a currency), Slovenia, and Belarus.
But there are also countries which levy taxes on the crypto that is earned or owned by its citizens. Canada, for instance, considers digital currencies to be commodities and are therefore taxed either as business income or capital gain.
Brazil categorises cryptocurrencies as assets and taxes the companies and traders operating with them. In the Netherlands, cryptos are considered to be barter items and not currencies, and the traders are taxed on the basis of the income tax rates.
The United States is yet another country that does not view cryptocurrency as a currency but an asset. That is to say that any crypto investment done by traders and investors is subject to either a short or a long-term capital gains tax.
Cryptocurrency operates globally and with such different regulations that change with each passing border, it becomes a tiresome job to take care of all the taxing formalities.
But with a platform like Token Tax, the citizens of the United States can breathe easy and file their taxes smoothly.
What is TokenTax?
After the IRS issued a statement of taxing the cryptocurrencies as short and long-term gains, things have been difficult for crypto traders in the United States. TokenTax is a platform which, amidst all these notices, offers a rather simple tool for filing cryptocurrency taxes.
The platform works with all crypto exchanges and helps crypto investors minimise their tax liabilities. TokenTax is a team of designers, engineers, and finance professionals who have created a company that marries a love of design and user-experience focused engineering with unparalleled tax enterprise and knowledge.
How does TokenTax work?
The tax filing process in TokenTax is perhaps the simplest filing process.
Step 1: Users sign-up on the network and import their data. They can link their accounts to TokenTax and import all of their transaction data from whatever crypto exchange they use.
Step 2: TokenTax calculates the tax liability and generates the required IRS forms needed to properly file the taxes.
Step 3: The user then exports the filled-out form which can be sent directly to the IRS.
TokenTax has been increasing rapidly in its operations. It’s marginal tax calculator and advanced infrastructure for large databases is making crypto taxes easier to file. Also, the network offers constant messaging service to keep the users in the loop.
Moreover, in March TokenTax became members of the TaxAct and TurboTax partner programs.
With all the progress the project is making, the team is currently working on further improving the UI/UX as well as automated exchange integrations.
Hitesh Malviya is the Founder of ItsBlockchain. He is one of the most early adopters of blockchain & cryptocurrency enthusiast in India. After being into space for a few years, he started IBC in 2016 to help other early adopters learn about the technology.
Before IBC, Hitesh has founded 4 companies in the cyber security & IT space.
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