Question 1

Do you pay taxes on Bitcoin?

Accepted Answer

Yes. The IRS treats cryptocurrency as property, so you do pay taxes on Bitcoin whenever it's sold, traded, or used to purchase goods and services. Failing to report crypto activity can result in audits, penalties, interest charges, and even potential criminal charges for tax evasion. The IRS has ramped up enforcement around how Bitcoin is taxed, so it's critical to stay compliant and work with a qualified accountant to avoid surprises.

Question 2

How is Bitcoin taxed?

Accepted Answer

It depends on the activity. Sales and swaps generally trigger Bitcoin capital gains tax, while self-mined coins may be subject to ordinary income and later Bitcoin capital gains when disposed of.

Question 3

Who needs an accountant?

Accepted Answer

Anyone who files taxes, whether it be for personal, business or both, should be working with an accountant who knows how to navigate the IRS tax regulations and provide you with the best advice you need to remain compliant and save money on your taxes in the long run.

Question 4

How do you keep up with the latest tax laws?

Accepted Answer

We have to read a lot of current events related to our industry as well as attend a minimum number of courses so we satisfy nearly 40 hours of continuing education each year. Our team is well-versed in a variety of areas to better serve our clients.

Question 5

When can I expect to see my completed tax returns from you?

Accepted Answer

Our clients may schedule appointments on our website to have their tax returns prepared on the day of the appointment. The other option is to simply upload your tax files to our portal, and in 2-4 weeks, we will have that return completed and sent back for your review. The closer we get to April 15th, the longer the timeframe may be. You can email info@lcltax.com to request more information on how to begin working with our firm.

Question 6

What kind of information does an accountant need to be able to prepare my tax return?

Accepted Answer

In order to start preparing a tax return, we would like to obtain a copy of your prior year tax filings and then we would want all W-2's, 1099's, 1098-int along with expenses, so we can start preparing the current year filings. Our firm can send over a digital organizer to help you get started.

Bitcoin Taxes - Learn Today

LCL Tax Team Bitcoin Accounting & Advising

Bitcoin Taxes FAQ

Filing your own taxes? Check out LCL Tax Team's Bitcoin Tax Course.

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