IRS Puts Focus On Crypto As Tax Filing Season Due To Close April 18

IRS – As cryptocurrencies’ market capitalization topped $2 trillion and proceeded to climb in value in recent months, governments and revenue organizations, including the US Internal Revenue Service, have paid more attention to them (IRS).

In particular, taxpayers in the United States who are filling out their tax returns this season may notice a tiny adjustment to the cryptocurrency question.

According to the newsletter from March 29.

“At any time during 2021, did you receive, sell, exchange, or otherwise dispose of any financial interest in any virtual currency?”

This question has been present in the income tax returns since 2019, but so far has only asked about acquiring the cryptocurrency.

This is the first time that the disposal of crypto is mentioned in the form

The IRS is inquiring whether the taxpayers have used Bitcoin (BTC), Ethereum (ETH), or any other digital asset, to purchase goods and services during the fiscal year. 

As a result, any gain in the value of a cryptocurrency is taxable if the taxpayer sells it for a profit, swaps it for other cryptocurrencies, or even uses it to pay for items at big merchants that accept cryptocurrency, such as The Home Depot or the Microsoft Store.

You must declare any gain or loss you incurred as a result of the action. Furthermore, if you receive cryptocurrency as a form of payment, you must declare the fair market value in US dollars at the time of receipt.

The tax filing season in the United States typically runs from January 24 to April 15, when the IRS begins accepting and processing returns for the previous year. This year, the closing date has been moved to April 18, due to the Emancipation Day holiday.

Crypto tax in other countries

Financial authorities all over the world are seeking for ways to gain more visibility in the crypto market and tax these attractive assets.

The Organisation for Economic Co-operation and Development (OECD), which issues economic policy recommendations to its 38 member nations, is working on a Crypto-Asset Reporting Framework that would require crypto exchanges to disclose information with tax authorities.

Furthermore,CoinCu previously revealed that the Indian government was considering a 30% tax on trading cryptocurrencies and non-fungible tokens (NFTs), leading the launch of a Charge.org petition to lower what they view to be unfair crypto tax rules.

As of this now, the cryptocurrency market is valued $2.16 trillion, up 9.64 percent in the last week and 0.93 percent in the last 24 hours.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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