Understanding Taxes on Bitcoin, Ethereum, etc.

As we near the holiday season and eventually the end of the year, cryptocurrency traders should be starting to think about the tax implications of their year of activity. Whether we like it or not, taxes are a necessary evil, and not reporting and paying those taxes can come with serious penalties

For active HODLers out there, you've probably come across some of the various horror stories stemming from traders who are not aware of their respective tax laws. And while I'm certainly no tax expert, there are some tips and resources out there to keep you in check.

For newer traders, it's important to know two main things:

• Taxable events for cryptocurrencies are triggered by selling, trading, or spending them. Don't forget that you could owe taxes for any income earned.
• If you have only purchased and held, then you should not owe any taxes (I'd recommend double checking though)

How to Stay on Top of Your Taxes
The #1 Resource for tracking your cryptocurrency taxes is bitcoin.tax

Bitcoin.tax provides several useful services pertaining to cryptocurrency taxes:

• Track any activity that may result in taxable events including trading, income, and spending. You have the option
• Import trades seamlessly from major exchanges such as Binance, Coinbase, Bittrex, Kraken, and many of the other industry leaders
• Calculate short term and long term capital gains based on your tax rate
• Export your activity for use in filing your taxes

While bitcoin.tax has complimentary services, you may find that their premium offerings best meet your needs. Consult their website for the different packages they offer.

As I personally navigate my 2018 taxes, I will follow up with another post with more steps to take to seamlessly file your crypto taxes. For 2017, I was able to use my bitcoin.tax export to file with TurboTax. If there's any interest in reviewing those steps, please let me know and I'll make sure to include those.