Today, we are excited to announce the launch of TaxBit on Uphold. TaxBit is a tax engine that supports transactions between any crypto or fiat currency. TaxBit was founded in 2017 by a group of CPAs, tax attorneys, and software developers.
Their mission is to help cryptocurrency become mainstream by facilitating easy compliance with government tax rules. TaxBit provides consumers with an easy way to file their cryptocurrency taxes.
How to get started using TaxBit:
- Visit www.taxbit.com/invite/uphold
- Create an account with TaxBit and agree to the terms and conditions
- Choose either a Basic, Plus or Pro plan and enter payment information (the 10% discount will automatically apply when using the link in step 1).
- Link your wallet by choosing “Connect Uphold Here”
- Authenticate your Uphold account
- Once you’ve authenticated, your Uphold transactions information will start populating in your TaxBit account. From here, TaxBit will calculate your taxes and generate your tax forms.
Uphold members will receive a 10% discount on TaxBit services by using the promo code Uphold at check out.
“TaxBit is thrilled to partner with Uphold making filing taxes on crypto trades simple,” says Austin Woodward, CPA, and CEO of TaxBit. “TaxBit will automatically pull in all of you Uphold transactions, track your cost basis, calculate the taxable gains or losses on each trade, and auto-generate the necessary tax forms. Last year was a rough year for most crypto investors. TaxBit can ease the pain by helping you report your losses and increase your tax refund this year while possibly reducing your tax liability in future years.”
What should I know about Cryptocurrency Taxes?
In the past, laws around United States cryptocurrency taxes were blurry and confusing. This caused many crypto-holders to take the risk of avoiding taxes altogether.
As cryptocurrency has grown, so has United States regulation. The 2018 tax reform on virtual currencies provides clarification and definition on how to file.
There are two main reasons you should file your cryptocurrency taxes this year:
- The IRS. If you don’t file cryptocurrency taxes, you could be facing a maximum sentence of five years in prison or a fine of $250,000.
- The possibility to recoup losses. If a cryptocurrency user realized losses (converted between another cryptocurrency or back to FIAT at a loss) during 2018, they are eligible to recoup some or all of those losses now, or over time. In the year that the loss was incurred, taxpayers are allowed to deduct losses up to:
- $3,000 if married filing jointly
- $1,500 if single
Taxpayers can also carry forward any losses above those limits into future tax years to offset future gains.
Will I receive a 1099-K from Uphold?
This year members who have a U.S. mailing address and a U.S. Tax ID or TIN will be receiving a 1099-K if at least one of the following applies to your account:
- Have executed an aggregate amount in excess of $20K in 2018;
- Completed more than 200 distinct transactions; transactions include
- Deposits of any currency
- Internal transfers (Member A to Member B) of any currency
- Transfers within members wallet from/between card A and card B or between any two currencies
The 1099-K will be available to view and download in your Uphold wallet by January 31, 2019. For those not receiving a 1099-K, a complete transactions list (CSV file) will be available to download. This CSV can be provided to your tax professional to produce an 8949. For those using TaxBit, the service will handle this step for you.
How can TaxBit help
Uphold members in the U.S. can easily connect their Uphold accounts with TaxBit, which will automatically run all of their transactions through TaxBit’s tax engine. This will generate your IRS Tax Form8949.
The 8949 tax form, along with a transaction by transaction audit trail, can then easily be handed over to a user’s accountant or uploaded straight into popular tax filing software such as TurboTax, TaxAct, etc.
TaxBit will keep track of your capital losses and carryforwards in order to make sure that you are receiving the maximum tax benefit possible this year and subsequent tax years.
Although TaxBit is currently only available in the United States, TaxBit is working on a solution for Uphold members around the globe to have access to the platform.
Uphold members receive a 10% discount by using the promo code Uphold at check out. Visit www.taxbit.com/invite/uphold to sign up and get started.
*This summary has been prepared for informational purposes only. It is not intended to provide tax, legal, accounting or financial advice and should not be relied on for such. Uphold does not offer or give such advice. You should consult your own tax, legal, accounting and financial advisors regarding your own specific circumstances before taking any action or if you have questions or require further details. TaxBit is a third party application and Uphold takes no responsibility for the TaxBit software or its operation.