How I filed my tax for cryptocurrency

How to file tax for Cryptocurrency with cointracking

Hello, I’m Naomi.
I wrote an article about filing tax before and I finally filed my tax for 2017.
It was painful -_-

Filing tax always sucks and filing tax for cryptocurrency makes it 100x worse.
I didn’t even know I had to file tax for it until a month ago.
I didn’t think I would need to file tax when I didn’t cash them out.

This article explains why and what is the taxable event on trading coins.
https://cryptofu.xyz/how-to-file-tax-for-crypto-currency/

I will probably put the same information as the previous article about how to file tax for cryptocurrency but I’ve learned a lot more since.

You have to file tax for trading your cryptocurrency

It’s not just a rumor or a myth.
It is a fact.
I checked with tax professionals.
They confirm you have to pay tax if you trade coins and get some profit.

If you buy ETH with your BTC after BTC’s value gets higher than when you purchased, then you have to pay tax!!

Every single transaction between coins, if you gain something, you have to pay tax.

It’s not easy to calculate

I had like 450+ transactions last year.
I didn’t think it was possible to calculate them.
You have to remember every single one of them and check the price of the coin at the moment of the transaction and compare that with the price of the coin when you bought.
It’s so much work.

Honestly, I was in a panic.
I researched and researched but all I found was more reasons to believe I have to do this one transaction by one transaction.

What saved me

Cointraking for crypto tax

The service is called Cointracking.
here is my referral link https://cointracking.info?ref=M234171 

I’m not recommending this only because of the referral link.
I seriously depended on this for filing my tax.

How to generate your tax document with Cointracking

Before you continue, you need to import data to Cointracking.
Please check this article first if you haven’t done that.

How to connect Binance and Cointracking with API

Let’s get started.

Click the “Tax-Report” or go to here https://cointracking.info/tax/

cointracking tax report

cointraking tax report start

Click the button “Open settings and create a new Tax Report” to start.
Also, click the image to see the detail.

Configuring your report

how to file tax for cryptocurrency with cointracking

I wasn’t doing any margin trading so al I really cared here was:

  • Tax year
  • Tax short-term (Unless you kept your coins more than an year, you don’t need long-term)

That’s all. I left everything else as it is but I showed this to a tax professional and she confirmed that’s all I need.
Your situation might be different so I would recommend you to work this part with a tax professional.

Once you click the orange button “Generate a new Tax Report now!”, it should generate your report!
Yes it’s that easy.

Checking your tax report

How much you hvae to pay for cryptocurrency tax

Now you report should show up in the page.
As you see in the image, it should show your total gain and how much you will have to pay for your tax.

Once you click “Load report”, it will load the detail of your tax.

How to file tax for Cryptocurrency with cointracking

There are many choices but you see the button saying “Form 8949 Statement Download”.
This is usually what you need for filing the tax for Cryptocurrency.

I gave this my tax person and she said everything looked good!

Conclusion

Cointracking is the best way to file your tax for Cryptocurrency!

I strongly recommend it. Oh and did I say it’s free?

Thank you for reading 🙂

Yes, you have to pay tax for crypto currency!

 

 

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