With tax season upon us, it’s important for cryptocurrency investors to start thinking about how their trading and HODLing might affect their taxes this year. Individuals and businesses turn to BlockFi to help limit their tax liabilities and avoid having to liquidate their crypto holdings in order to pay off hefty tax bills. As an extension of that support, we have partnered with some of the industry’s best crypto tax software companies that provide easy to use tools that pull in your trade data straight from exchanges and automatically calculate and create your tax documents. These companies include:
Calculating your crypto taxes is one of the more stressful parts of being a cryptocurrency trader. The time it takes to report on your crypto taxes depends on the number of coins you have, the number of trades you’ve done, and the number of exchanges you trade on. Not only that, but every exchange has a different output for tracking your trades, with some providing no output at all. Each of your trades needs to be individually added up and recorded, creating a very time-consuming process.
Our crypto tax software partners help cryptocurrency investors easily import their trade data into their platforms. Once all of your information is uploaded, the platforms will generate all the necessary tax forms, ready for filing with the government. Every provider is slightly different so we recommend reviewing each individually and making a decision based on your individual needs.
The BlockFi team works with customers every day to help limit their tax liabilities and avoid having to liquidate their crypto holdings in order to pay off hefty tax bills. For example, we have customers who incurred significant capital gains exposure when the crypto market was near its all-time high. For many of these individuals, the tax burden associated with those taxable event trades were significantly higher than the current value of their remaining crypto and find themselves in a cash-strapped situation where they might be forced to sell their remaining holdings in order to pay their taxes. BlockFi helped them use their crypto to get USD to pay off their taxes without having to sell their crypto.
As always, BlockFi recommends seeking an independent and personalized tax professional for financial advice before making any financial decision.
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