What are the common mistakes to avoid when filing cryptocurrency taxes with TurboTax desktop?

3 answers

• Dec 24, 2021 · 3 years ago
  One common mistake to avoid when using TurboTax desktop to file cryptocurrency taxes is failing to report all of your transactions. It's important to include every buy, sell, trade, and transfer of cryptocurrency, even if it seems insignificant. The IRS requires you to report all cryptocurrency transactions, so make sure to keep accurate records and include them in your tax return. Another mistake to avoid is not properly calculating your gains and losses. Cryptocurrency transactions can be complex, and it's crucial to accurately calculate your capital gains or losses. TurboTax desktop can help you with this, but you need to provide accurate information and double-check your calculations. Additionally, some people make the mistake of not reporting their cryptocurrency holdings at all. Even if you haven't sold or traded any cryptocurrency, you still need to report your holdings. Failure to do so can result in penalties and legal consequences. To summarize, the common mistakes to avoid when using TurboTax desktop for cryptocurrency taxes are: not reporting all transactions, not properly calculating gains and losses, and not reporting cryptocurrency holdings.
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• Dec 24, 2021 · 3 years ago
  When it comes to filing cryptocurrency taxes with TurboTax desktop, one common mistake is not keeping track of your cost basis. Your cost basis is the original value of your cryptocurrency when you acquired it. It's important to keep records of your cost basis for each transaction, as it will determine your capital gains or losses. TurboTax desktop can help you calculate your cost basis, but you need to provide accurate information. Another mistake to avoid is not reporting your cryptocurrency mining income. If you mine cryptocurrency, you need to report the value of the coins you mined as income. Failure to do so can result in penalties and audits. Lastly, some people make the mistake of not consulting a tax professional or seeking guidance when filing their cryptocurrency taxes. The tax rules for cryptocurrencies can be complex and constantly changing. It's always a good idea to consult a professional who specializes in cryptocurrency taxes to ensure you're filing correctly and taking advantage of any available deductions or credits. In conclusion, the common mistakes to avoid when using TurboTax desktop for cryptocurrency taxes include not keeping track of cost basis, not reporting mining income, and not seeking professional guidance.
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• Dec 24, 2021 · 3 years ago
  At BYDFi, we understand the importance of accurately filing cryptocurrency taxes. One common mistake to avoid when using TurboTax desktop is not properly categorizing your cryptocurrency transactions. TurboTax provides different categories for different types of transactions, such as buying, selling, and trading. It's crucial to select the correct category for each transaction to ensure accurate reporting. Another mistake to avoid is not reporting your cryptocurrency airdrops and forks. If you received free coins through airdrops or forks, you need to report them as income. TurboTax desktop can help you with this, but you need to provide accurate information about the value of the coins you received. Lastly, some people make the mistake of not keeping proper documentation of their cryptocurrency transactions. It's important to keep records of all your transactions, including dates, amounts, and counterparties. This documentation will be useful in case of an audit or if you need to amend your tax return. To summarize, the common mistakes to avoid when using TurboTax desktop for cryptocurrency taxes are not properly categorizing transactions, not reporting airdrops and forks, and not keeping proper documentation.
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