Here’s an interesting loophole for cryptocurrency traders for 2018 tax returns. If this works for you, you may not need to file a tax return at all. And, of course, if that is the case, there is no tax due.
Your gain from crypto sales is considered capital gains.
If you have held the crypto for one year or less, the gain is considered short term gain. In that case, you need to file if your short-term gain is over $12,000 (single) or $24,000 (married, filing jointly).
If you have held the crypto for more than a year, the gain is considered long term gain. In the case of long-term gain, you need to file if your long-term gain is over $38,600 (single) or $77,200 (married filing jointly).
Otherwise, if your short term or long-term gains are under the amounts discussed, you don’t need to file.
Of course, with the recent IRS crackdown on crypto trading, it is possible that you may get a notice from the IRS if you don’t file. That still doesn’t mean you need to file a return. It just means you may need to prove WHY you don’t have to file. Some crypto traders have made the decision to file regardless, simply because they want to establish a pattern of compliance.
There are a lot of rather strange tax rules regarding taxes for crypto traders. That’s why we focused on Crypto Tax at our Wednesday March 20, 2019 coaching session. Don’t assume you know the tax laws! They have changed.
Talk to a crypto tax pro or come join us Wednesday for our next coaching session. You can join by going to https://www.ustaxaid.com/sign-in/?wlfrom=%2Fcategory%2Fcoaching%2F
Bring your questions! Or drop a note to me at Coaching@USTaxAid.com. I’ll cover the questions in the next session.