Everyone hates them, but there’s a ton of questions
How do I pay taxes on crypto?
Do I have to pay taxes?
Do I need to track every trade?
There’s a lot of confusion surrounding this topic. With such an emerging market and little regulation, it leaves us confused about what to do.
The last thing you want is to be on the IRS radar.
Now – I am a citizen of the US so the tax laws might be different in your respective country.
The ONLY money I have taken out of crypto and put back into my bank was my original investment. I have been trading with PROFITS for the last year. I started with a small amount, just under $2000 and have not deposited more than $20,000 into my Coinbase account.
My first piece of advice – Be prepared to PAY taxes on any amount you withdraw to your bank account (aside from your originally investment).
If you are putting more than $20,000 into your Coinbase account – you are automatically ON THE RADAR.
Coinbase will be QUICK TO SNITCH. This goes for GDAX as well. If you have over 20k, it might be time to find another exchange.
My strategy and advice moving forward – Exercise your hardware wallet. This is the best place to keep funds.
Do not withdraw more than necessary to your bank. If I need to withdraw 10k, FINE. I’m expected to pay CAPITAL GAINS TAX.
I do not think we are far away from mass adoption. If Cryptocurrency becomes a way payments we can use in our day to day lives (without having to use a bitpay credit card), then I want to position myself accordingly.
Wouldn’t be a bad idea to keep track of your trades. If you’re looking to take large profits out of crypto, I’d look for an accountant.
There /are/ some “loopholes” and ways around it, don’t want to get into too much detail here. I am not an accountant or financial advisor. However, I am exploring alternatives.
Bottom line – If you WITHDRAW money from your exchange account and INTO YOUR BANK account, you are EXPECTED to pay taxes on it. Totally up to you if you want to or not – the IRS can audit you up to 3 years. If you get caught – expect to owe WAY MORE than you originally planned.
Anyone has questions or tax related solutions/advice – this is the thread!
