Show HN: CryptoTrader.Tax – Tax calculator for your crypto trading (opens in new tab)

This is the real question. Doing taxes my first year was easy. The following year is was much harder.

The tool does, it will carry over the cost basis from previous years of trading for calculating the next year's short/long term gains.

For Robinhood crypto, there's form8949.com which is generally fantastic. It can import from a number of crypto exchanges in addition to the traditional brokers.

Doesn't Robinhood already provide crypto transactions in their Form 1099?

If you didn't keep proper records, then use the cost basis of your crypto as 0 and report the sale price as pure profit. You will never under pay your taxes that way, and if your numbers are low enough, it's probably worth it to overpay on taxes than to spend the time recovering detailed records of what happened in between.

If it's too big of a number for you, then better remake / recover those records. Luckily you have a permanent record called the blockchain.

If you need a rule of thumb, for example you want to have a rough idea what your taxes would be like to see if you're comfortable doing some liquidation or something, then sure. I'd back-of-the-napkin long-term gains at 20%, and short-term at 35% (covers both federal and state; assumes U.S.).*

Again, very rough. You need concrete numbers once you do actual trading, because in the U.S. you are required to make estimated tax payments. The actual numbers can, for example, vary wildly from nearly 0% to upwards of 50%.

* These are based on a typical 15% federal tax on long-term gains and 5% for state taxes; or 35% being a comfortable average for most people's effective tax rate in the U.S. for short term gains. The 50% tax rate is approached when you have largish gains, toward $1 mil or so, and live in expensive states like New York or California.

> 10% of your profits

Calculating your profits (and loses) is what these sites generally do -- that is usually the hard part, especially if you have a lot of transactions. Not to mention, the way that you calculate that differs by jurisdiction. Loses are just as important since they can have a significant benefit to the taxes you owe. I use bitcoin.tax and then export the data for my accountant to fit into the rest of my tax return.

In the US, profit on crypto is straight up capital gains. Held for less than a year = short term capital gains, taxed as regular income. Long term depends state-to-state, but overall taxed less than income (federal has 3 brackets - 0, 15, 20% depending on your income. 500k+ puts you in the 20% bracket)

Yes. I pay my taxes, and I suspect many other people do, too. Tax compliance in the US is generally pretty high.

I also don't steal books from the library, even though I'm pretty sure I could get away with it.

Yes, it is quite easy to pay taxes on crypto and quite difficult to explain during audit how cash ended up in your bank account without associated tax payments.

Pay your taxes!

Yes. I've used bitcoin.tax the past few years. This one looks nice although it's missing a couple exchanges that I would need to use it next year (maybe they'll have them by then).

yes, the IRS concluded that "less than 800 people pay taxes on crypto" using a flawed and simplistic search string. I looked at how I reported various gains filed in 2014 and 2015 and it would not have included me in those 800 people.

the best thing about bubbles getting larger is that more people with more personalities and expertise are aware of what these things are. A judge wouldn't rubber stamp a subpoena on such basic and flawed logic, a treasury secretary wouldn't trust their employee with as shoddy an analysis, influential senators wouldn't believe it as their own altcoin trades wouldn't be counted. speculation drives innovation.

Yes.

Since we've just had our Happy New Tax Year, other UK readers might be interested in this Reddit thread, if only because of the tax-related links: https://www.reddit.com/r/BitcoinUK/comments/ba8d89/tax_threa...

I don't do crypto, if I do I wouldn't. Just like I would not for cash transaction. I know legally I should and there is some risk but the risk is low enough.

legal answer: yes

pragmatic answer: only if you interacted enough with the US financial system that the IRS might catch you.

From a tax perspective, sure. If you bought any time before the fall of 2017, and sold any time in 2018, it's pretty easy to have realized a gain in 2018.

Many people sold BTC at $14k+ and then bought back in at 10k, 5k, etc. If they didn't sell again for all of 2018 they'd only have "realized gains" and no realized loses. So on paper they'd have only have gains, as the IRS doesn't recognize the market value of your current holdings.

Of course.

You can short established coins like BTC and ETH.

There are also so called "flip seasons" where you throw money at random small cap altcoins and flip them 30-200% higher over the course of a month. These happen whenever BTC settles down and consolidates before plunging to news lows.