Software firm TaxBit based in Utah launched the TaxBit Network. Large crypto companies such as Gemini, Coinbase, and SuperRare, comprise TaxBit Network, which permits customers of affiliated companies to gain access at no charge with 2021 crypto tax forms.
TaxBit CEO and co-founder Austin Woodward explained to CoinDesk that he plans to simplify the crypto tax process by making the software more accessible within the context of filing ease and cost.
Crypto holders find crypto taxes to be challenging, expensive, and confusing. Filing costs per year can reach up to thousands of dollars, explained Woodward. High-frequency trading becomes costly, especially during tax season for crypto-doers and high fees of transaction values charged by consumer tax aggregators.
The TaxBit Network participants include Celsius Network, Binance.us, FTX.us, Uphold, Gemini, Blockchain.com, CEX.io, Coin list, Strike, Coinbase, Paxos, OKCoin, and BlockFi. In addition, decentralised finance (DeFi) newbie companies like SuperRare and Uniswap are included, as are traditional fintech firms like PayPal and SoFi.
TaxBit’s Network will simplify the process involved with virtual asset users and investors when they prepare their tax returns for the 2021 filing season. Each affiliated TaxBit Network firm user will have the chance to obtain a 2021 tax information form for free, such as the IRS Form 8949, which the Internal Revenue System requires to report sales, property exchanges, dispositions, and dispositions, plus other forms that will require a report for income.
TaxBit reports that many participating platforms will integrate free TaxBit signup with only a single click in coordination with the launching of the TaxBit Network. This process will incorporate the company’s traditional applications with that of TaxBit to simplify 2021 tax form access and year-round access to the top industry software owned and run by TaxBit.
Learning about taxes and cryptocurrency might be overwhelming for crypto users. Many crypto experts recommend a beginner-friendly platform like Binance or the Bitcoin Up app to learn more about it in a straightforward method.
According to Woodward, users do not need to pay for the tax forms of TaxBit Network regardless of the transaction volume.
Despite the use of bot trading, crypto holders do not need to be concerned about paying massive tax bills when preparing taxes. TaxBit has eliminated transaction limits, which is a first for the industry.
Moreover, Woodward envisions that simplifying crypto taxes will bridge that gap between crypto holders and the Internal Revenue Service, which is one of the reasons for the non-filing of cryptocurrency capital gains.
TaxBit believes that crypto users do not desire to evade taxes purposely. They just find it too complex to figure out and too costly.
The crypto industry is responding positively to TaxBit Network, and more companies are expected to join it before the tax season ends in April.
Crypto businesses want to work with the regulators and plan to assist their users in reporting their taxes. Woodward further clarified that problems with reporting taxes are not due to a lack of desire; instead, it requires a large amount of money for implementation and a technological challenge.
Other crypto firm CEOs also agree with this observation of Woodward.
Tyler Winklevoss, CEO of Gemini, affirmed that Gemini is devoted to compliance and is proactively helping its investors by providing users access to tax reporting tools to keep them atop their obligations with cryptocurrency tax. In contrast, tax regulations are currently being discussed.
Tax forms will soon be available to users starting Tuesday through the participating app of the institution or the website of TaxBit Network.
Issues with Compliance with Digital Tax
The IRS is blatant in pursuing crypto users who engage in transactions and do not report their transactions accurately and pay tax on those transactions. The IRS expects crypto users to comply with the rules to report activities concerning assets, including property or currency. Although there is complexity with the technology, it is more straightforward with the taxation process. This is considered a taxable event when one spends or disposes of digital currency. A tax is expected when someone sells or trades something for a value greater than the one paid for. TaxBit will make the process easier for taxpayers with its features of an unlimited product or an unlimited wallet.
