What are the common mistakes to avoid when filling out form 8949 for cryptocurrency?

3 answers

• Dec 28, 2021 · 3 years ago
  When filling out form 8949 for cryptocurrency transactions, it's important to avoid the mistake of not reporting all your transactions. Make sure to include every buy, sell, and exchange of cryptocurrencies, even if they are small or insignificant. Failing to report any transaction can lead to penalties or legal issues with the IRS. Additionally, double-check all the information you enter on the form, including the dates, amounts, and cost basis. Any errors or discrepancies can raise red flags and trigger an audit. It's always better to be accurate and thorough when reporting your cryptocurrency transactions.
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• Dec 28, 2021 · 3 years ago
  One common mistake that people make when filling out form 8949 for cryptocurrency is not keeping proper records of their transactions. It's crucial to maintain detailed records of all your cryptocurrency transactions, including the dates, amounts, and values at the time of the transaction. This will help you accurately calculate your gains or losses and ensure that you report the correct information on form 8949. Without proper records, it can be challenging to provide supporting documentation if the IRS requests it. So, make sure to keep track of all your cryptocurrency transactions.
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• Dec 28, 2021 · 3 years ago
  As an expert at BYDFi, I can tell you that one common mistake to avoid when filling out form 8949 for cryptocurrency is not consulting a tax professional. The tax rules and regulations surrounding cryptocurrency can be complex and constantly changing. It's always a good idea to seek professional advice to ensure that you are accurately reporting your transactions and taking advantage of any applicable deductions or exemptions. A tax professional can help you navigate the intricacies of form 8949 and ensure compliance with the IRS requirements.
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