Best Apps for Tracking & Doing Crypto Taxes

Many people wrongly assume that they aren't subject to tax just because crypto assets are intangible. Unfortunately, that’s not the case, and the IRS has invested in technology to track those individuals not paying tax. Essentially, crypto is treated just like any other stock trade – if you make any profit on your stock, crypto or otherwise, you’ll be subject to gains tax. Your tax rates will change depending on firstly, how long you’ve owned the asset, and secondly, how much money you made from it. Consider using an app like Stocktwits. It’s essentially a forum for those who trade crypto, and it’ll give you the basic information on taxes and other regulations. 

So, when does the tax apply to crypto-assets? If you’ve bought crypto stock and you only intend to hold it, you won’t incur any tax just yet. You’ll only need to file a tax submission when you come round to selling, just like a regular stock. Submitting crypto tax isn’t all that hard – after all, pretty much everything’s digital these days, so there’s no need for mountains of paperwork. If you use an app like Binance to trade with, they’ll likely have a tax information section of their app or website to help you. Binance lets you create a tax report there and then use an API. All tax is subject to your income, so you need to make sure you fill out your tax returns on all the money you’ve earned at the end of the year. 

As mentioned, you’ll only pay tax on crypto assets when you sell or transfer them. If you’re smart, you can calculate the best time to sell, meaning that you’ll only pay tax once rather than multiple times. As you become more experienced at crypto trading, you’ll build up a portfolio. As with any company stock, it’s best to invest in as diverse a range of crypto assets as possible to ensure that any losses are minimized. That could mean holding a little Bitcoin, Ethereum, or possibly some NFT assets. You’ll find that this is the best way to manage your money efficiently and will see you return greater profits over the long term. Remember that investing shouldn’t usually be considered a short-term game; it’s best to think years, if not decades, rather than months ahead.