For now, the feature is only available to Coinbase users who file their tax return with TurboTax.
Coinbase is partnering with TurboTax to let users convert their tax refund into cryptocurrencies.
The cryptocurrency exchange introduced the new feature on Thursday as US tax season begins. Many filers will get a tax refund from the US government, which can be received as a cash payment sent directly to their bank account. However, Coinbase is now offering a new option: Through TurboTax's tax software, a user can transfer the refund to their Coinbase account, where it can be converted into over 100 cryptocurrencies as an investment.
“This year, customers can deposit refunds into Coinbase fee-free to start immediately putting their money to work,” the cryptocurrency exchange wrote in the announcement. “Coinbase is committed to giving everyone instant and easy access to the cryptoeconomy.”
The tax refund can also be deposited into a Coinbase account as US dollars, giving users the freedom to invest in a cryptocurrency at a later time. That might be prudent since Bitcoin’s price has plummeted by almost 50% over the last three months and continues to fall. So participating users should brace for wild value fluctuations. It’s also important to note any cryptocurrency gains you make are taxable under IRS rules.
The new tax refund option from Coinbase arrives months after the cryptocurrency platform began allowing users to deposit their paycheck into their Coinbase accounts.
The company’s announcement has more detailed instructions on how users can access the cryptocurrency tax refund option, which involves several steps. Interested users should go to TurboTax’s dedicated Coinbase page to start.
