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It's tax season, so sharpen your pencils for the annual labyrinth-labyrinth ritual that covers nearly 1,000 forms of the IRS.
"We can only say certainty, except death and taxes," said Benjamin Franklin.
But one thing is certain: The Internal Revenue Service is worst than death. Call it a flipchart, call it a crime against human health.
To avoid the late filing penalty, be sure to file a #IRS return or request an extension, even if you can not pay the full amount due. See: https://t.co/3byJqk9fiF #IRSFreeFile pic.twitter.com/Bf5abuJO8I
– IRS (@IRSnews) April 4, 2019
Tax deadline expects no Bitcoin investor
The tax code requires you to decode more than 10 million words, 12 times longer than the Bible. In this jargon-filled obstacle course you will find phrases such as "exemption from exemption". I have a master's degree in accounting and I still can not understand.
Unfortunately, the government criminalizes you for not respecting extremely complex regulations that own employees and so-called IRS experts do not understand and / or can not clearly explain and / or can not agree. The bureaucratic desert that Washington has become would be unrecognizable to the founding fathers of America.
What is discouraging is that lobbyists buy politicians whose staff quietly Enter loopholes in the tax code (where there are 50,509 restrictions) charging companies like Amazon (ranked # 8 in the Fortune 100 ranking) zero federal taxes despite income of $ 11.2 billion in profits last year.
Maximum profits. Zero federal tax. Here's what you need to know about how corporations manage taxation pic.twitter.com/8r7dUcLNQo
– Bloomberg's TicToc (@tictoc) April 7, 2019
The preparation of cryptographic taxes: the antithesis of decentralization
Crypto investors must have extremely detailed recordings of all purchases, sales, trades and trades – including fork revenue and aerodromes (both of which are missing from law and guidelines) – that took place last year, says Pat Larsen, CEO of crypto software -Reference ZenLedger, to CCN.
"Cryptocurrency is one of the most complex areas of tax law. Users must follow their activities for tax purposes. It is therefore useful to have accurate documentation of your token portfolio. "
At a webinar held on April 3, Andrew Gordon, CPA and tax consultant specializing in cryptocurrencies, joined Larsen. The gentlemen have identified common scenarios that are taxable. These included:
- Sale of crypto to fiat
- Sale of crypto for another crypto
- Crypto exchange for an item or service (capital gains)
- Mining (Ordinary Income and Capital Gains)
- Fork revenue and airdrops
- Crypto pay
However, the following events are non-taxable: the purchase of crypto with fiat; transfer coins between portfolios; and offer up to $ 10,000 of equivalent per recipient. Users can also benefit from tax advantages when financing IRA accounts benefiting from a tax benefit.
If you follow your wallet with CryptoCompare or LiveCoinWatch, it's a good start.
Cryptocurrencies are not considered as currencies
Cryptos are treated as intangibles (IRS Notice 2014-21), which means that they are considered more like stocks than currencies. Coins are also subject to sale-wash rules prohibiting certain deductions from losses (when a taxpayer tries to play with the system).
"Your coins have short-term and long-term capital gains and losses, which are shown on Form 8949 [Sales of … Capital Assets]Appendix D, as well as line 13 of your Form 1040, "says Pat Larsen.
He tells CCN what information to collect. First, crypto users need to know the purchase date and price, the quantity of coins, and the date and price of the sale to calculate the gains (or losses). The base cost is the price of the token once acquired. Transaction fees can be deducted.
"The government indirectly wants you to sell cryptos to pay taxes. Suppose you make $ 20,000 by trading Ethereum in Bitcoin. Even if all your winnings are now in BTC, the IRS. wants his share of the $ 20,000 gain. But he wants the tax payment in dollars. "
You must therefore pay taxes on cryptographic gains (baduming that they are not canceled out by losses). The authorities do not care that you do not have money to make a payment. As a result, you will likely need to sell parts to pay your tax bill.
The Bitcoin tax return is a ridiculously hard work
Here is a glimpse of reality: the cryptographic ecosystem, with its ideals of decentralization and freedom, is part of the bureaucratic-lobbyist-political industrial complex. Where a faceless (and often unethical) bureaucrat says, "just hire a CPA or a tax lawyer" whose billing rates for junior professionals can exceed $ 100 at the hour.
But it's very expensive.
Americans spend an average of 54 hours telling the government what it should do already know. Employers and banks send financial and financial information to Washington, but you have to duplicate report anyway. In Europe, many governments do the calculations (that is, bureaucrats for taxpayers) and simply send the invoice to the Europeans, who check their accuracy.
But nooo-not with our IRS (it's the opposite: we work for the bureaucrats and send them redundant information.)
In addition, the agency is unclear on some rules, the IRS (and its 76,000 employees) remained silent on cryptographic instructions. since 2014 (before some Dogecoin investors have reached puberty).
I want to say, How are we supposed to report all these forks and aerodromes, some of which we were given without our knowledge? or consent, as trades have just dropped a pile of sh * t-coins into unused wallets.
But it's what it is.
Photo credit: worldwideinterweb.com
"Cryptocurrency is taxed as an badet, such as real estate or shares. So you pay taxes on realized gains or deduct losses, "says Steve McCullah, director of the Apollo Foundation, holder of the privacy currency APL. "I have no doubt that this will change in the near future because the IRS is struggling to keep its hands within reach of our money. An example of this is the death tax – taxing a person just to die. "
McCullah told CCN that regulation was one of the reasons his organization set up an unregulated platform that goes beyond the regulatory framework. all government.
April 15 reminds us what the founding fathers of the United States said about taxation:
"Forcing a man to provide funds for the propagation of ideas he does not believe and hate is sinful and tyrannical. – Thomas Jefferson "
"There are more examples of the abridgement of the freedom of the people by the gradual and silent encroachments of those in power than by violent and sudden usurpations." – James Madison "
"If Congress could use money indefinitely for the general welfare … Congress's powers would overturn the very basis, the very nature of the limited government created by the American people. – Alexander Hamilton "
So, you want to avoid fines or jail?
Good luck calling the agency: In 2016, the IRS answered 73% of incoming phone calls, with an average wait time of 9 minutes (instead of 21 minutes before). During the closure of the government, there was in fact no live customer service whatsoever.
Which raises the question: What is going on do you do with the $ 11.5 billion annual budget funded by taxpayers? Luxury on vacation at our price? In fact, yes!
But you're never going to see these clowns or their benefactor members or congressmen who write loopholes go to jail …no matter how obtuse the turpitude. Only citizens, who sometimes fall into hard times and run out of money, go to jail.
April 15: Circle your calendar.
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