7 THINGS YOU SHOULD KNOW ABOUT CRYPTO CURRENCY TAXES

With the heated discussion about crypto currency and block chain lately, the topic of taxes and financial impact has perked up. The crypto currency continues to gain traction in everyday life. However, there is still no solid guidance and adequate advice for tax professionals. With different theorize, here are seven things you should know about crypto currency tax.

1) The two tax forms. Majority investors in crypto currency are investor themselves.  To report on digital trades, they use Sales and Other Dispositions of Capital Assets Form 8949. They describe the assets they’ve traded along with the dates they acquired and sold it. They also include things such as the cost of doing the trade, how much they made, and their net gain or loss. Other than that, the form is also distinguished in short-term and long-term capital gains and losses. The second form concerns crypto trades is Form 1040 Schedule D.  This has short-term and long-term gains and loss with the going off information from Form 8949.

2) As the IRS confirmed, value of $600 or more done through virtual payment, which includes wages, annuities, rent, salaries, and compensation, it must be reported to the IRS. If there are no independent contractors, it must be reported on Form 1099-MISC by using the fair market value on the date of payment.

3) Crypto currency can also be subjected to income tax. This is for the miners who are paid through bitcoins for their work which makes it eligible for income tax. Mining also can be qualified for self- employment which also requires self employed tax.

4) All crypto currency sales and trades are taxable. You have to report all your gains and losses on your trades to the IRS. If you are exchanging a crypto currency for another one is also taxable. This includes converting it back to USD or spending crypto currency.

5) The IRS is more focused on keeping tabs on every trade. It was reported that over $20,000 was traded without proper taxation. If you try to avoid crypto currency tax or indulge in other forms of fraud, you can be sentenced to a maximum sentence of five years in prison or a maximum fine of $250,000. If you are not filing for crypto currency taxes, the IRS is sure to keep a very sever watch on your activities.

6) The crypto currency tokens are potentially tax free. With the upgraded crypto currency guidance by IRS a lot has changed in crypto currency space. The crypto currency that represents a service or asset and not a currency do not come under federal law tax. This it is a virtual currency that has equivalent value in real currency or act as a substitute for real currency. However, it is best to consult a qualified and certified accountant or lawyer before making any decisions regarding what you choose to include or exclude from the crypto currency taxes.

7) Paying taxes for crypto currency is like paying any other type of capital gains or income tax. However, there is one major difference. It is up to the investors to compile the information themselves. This needs planning and recording over thousands of data. You need to determine if you are a trader, employee or a crypto currency miner first.

As for now, the finer details of the crypto currency tax are not known. Many of IRS’s stands on certain status are not unclear. However, it can be assured that sooner or later, like most tax related issues, it will become more clear and simple for the public to understand.

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BEST CRYPTOCURRENCY EXCHANGES

Once you familiarize yourself with Cryptocurrencies, the first thing you are going to look for is a valid and solid broker or exchange. There are two types of exchanges, Fiat Exchanges and Crypto to crypto exchange. It means, currency for cryptocurrency or swapping of cryptocurrency with cryptocurrency. Based on your needs you can list out which exchange you would go through.

Whenever you have to choose your exchanges, look for 5 things: Privacy, Limits, Fees, Speed and Reputation

KRAKEN

Kraken is an exchange based in United States and was established in 2011. The fee charged by Kraken ranges from 16% for the seller and the taker will range up to 26%. You can deposit USD, EUR, CAD and other currencies. They also allow the deposit of cryptocurrency if you have any.

Kraken offers a leverage up to 5x. Kraken uses an intuitive interface and will allow amazing levels set for the investors. The margin trade will hence shoot to 5x. it also offers a wide variety of cryptocurrencies and is supported globally.

CEX.io

CEX.io is a London based exchange. It offers features like high security, liquidity and cross platform trading. The site offers great support service and is user friendly. It offers a lot of fiat currency pairs to trade.

The site is registered and secure. It has registered with FinCEN in the USA while obtaining 2 DSS certificate of high level security. Bitcoin, BitCash, Bitcoi Gold, Ethereum, Ripple futures, Dash, Stellar etc. are some of the cryptocurrencies available.

CEX.io enables various methods of payment. It accepts VISA or mastercard, bank or wire transfers. Like every other exchange, you will have to verify yourself as a user. With every level of verification, you will be given extra features to use.

Bithoven

Bithoven is one of the fresh entry in this industry. In spite of being a newbie in the cryptosphere, its features and algorithms have impressed the audience significantly. The user interface is perfectly suited for beginners as well as professionals. It has basic as well as advanced statistical tools. It offers analysis and candlestick charts which could be followed by beginners.

Bithoven supports over 350 altcoins. There are absolutely no purchasing and selling limits. It has one of the best customer services and live chat support. Bithoven is backed by one of the most renowned and trusted experts who are also users. The industry is expecting it to grow while Bithoven is ready to release new features.

BitPanda

Bitpanda was started in Australia and has a lot of investment opportunities. The swapping or exchanging of cryptocurrency through this broker is free of cost and instant. You can enable notifications to alert you about the price. Bitpanda will send you an email and notify you about the price.

Bitpanda is a very famous exchange which allows you to purchase cryptocurrency with USD, Euros, British pounds and Swiss Francs. It follows a two factor authentication and uses SSL encryption. It has a user interface which is very user friendly for beginners. Beginners will definitely have fun and will understand how to analyze, buy, sell and trade stocks.

GEMINI

Gemini was started in New York. It rapidly developed and delivered the image of one of the most reputed and a reliable exchange. It is the 39th largest exchange with a 24 hour volume quotation.

The security is very tight. The software is coded in a way that it holds only a specific amount of cryptocurrencies online while holding the others offline. Every US dollar invested or traded is secured by the Federal Deposit Insurance Company. This means, Gemini is fully registered with the banking standards.

It offers a very generous customer support and proper guidance to novices. It is well designed with features which can be used by professionals as well as newbies. It charges very low commission or fee. In fact, the bank or wire transfers are free of charge.

CoinHouse

This is one of the most simplest exchange you are going to find in the industry. You can buy bitcoins using Euro. Bank transfers or credit cards are accepted. Coinhouse gives you a feature which will let you store your coins for a limited period before you transfer it to your digital wallet. However you have to be a premium member to enable this feature.

They provide analysis about market risks given from experts. They will display risks and opportunities of every investment you want to know. They charge very low commissions

There are a lot of things that can be said about different exchanges. Every exchange is developed and desgined in a different way. All of them have their unique features and their drawbacks. Some might have every single thing that an investor would thrive for but would fall back on security. Picking the right one is tricky sometimes, but you come to know once you use and familiarize yourself with it.…

CRYPTO FRIENDLY COUNTRIES YOU WOULD LIKE TO VISIT

With the growing acceptance of the blockchain technology, the world has started to see its exceptional potential in the market. In fact, many countries have already started to adopt crypt currencies. This means that there are many countries that are emerging as crypto currency hotspots around the world. They are also opening up for crypto related business.

It is true that the crypto industry is yet to get a breakthrough in the global market. They are still in the developing and maturing stage. But many countries are actually trying to integrate the disruptive technology into their pre-existing frameworks. They are even drafting new legislation to help it move in the right directions. This can even turn into a potential win-win situation rather than a failure. These countries are actually taking pro active stance on crypto currency and blockchain technology. These are some counties which are indeed taking active steps to ensure growth and success of the digital economy.

Switzerland is the very first country on the list. The country is known for being one of the most progressing countries in the world. Therefore, it is not surprise that it is viewing the crypto currency and the blockchain technology as a positive stance. Even though you require exchanges to be licensed, the Swiss Federal Tax Administration (SFTA) considers crypto currencies to be assets rather than currency. It is one of the major hubs for blockchain developers. The crypto valley is actually situated in this country itself. This place has its low taxes, and also a lax view on crypto currencies. Zug is also the birthplace of Ethereum. Zug in fact is also one of the first towns to accept Bitcoin for several public services.

Next we have Japan which is perhaps one of the most tech-savvy countries in the whole world. Other than its cultural and scenic beauty, Japan also offers one of the most crypto and blockchain technology friendly environments.  The country is always in the forefront of the adoption of any new technological wave. It has adopted crypto and expanded its regulation around the new form of currency. It was actually introduced to protected consumers from exchanges should they go bankrupt. To carry out transactions with crypto currency, extensive regulations were also put in place regarding AML/CFT and KYC. Further, Bitcoin and Ethereum were recognized as being possible forms of payment. This led to a widespread use of crypto currency for general transactions across a number of retail stores. Currently, it is trying to make its way for the mass adoption of crypto as a method of payment.

Singapore is yet another country which offers a crypto and blockchain friendly environment. Businesses were unable to expand due to certain banking issues. However, the financial regulator announced that it was open to blockchain businesses so that it can work with banks help. The country recently passed a new regulatory framework for crypto payment processing businesses. Even though, the country is not yet at par with either Japan or Switzerland, it can be predicted that soon, Singapore will join the other as a leading country for crypto.

Estonia is also quickly emerging as the next crypto hotspot hub on the global stage. It is guiding the growth of the industry as well. Estonia is the first countries to regulate both crypto currency exchanges and wallets.  It is in fact the home of world’s largest digital assets exchange – Binance. It was favorable laws and a greatest of opportunities for the startups. The government is also open about the idea of the crypto and blockchain technology while acknowledging it’s potential.

If you are also looking for the best place to be as a crypto enthusiast, hope this will help.

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