What are some common mistakes to avoid when preparing cryptocurrency taxes?

3 answers

• Dec 20, 2021 · 3 years ago
  One common mistake to avoid when preparing cryptocurrency taxes is failing to report all of your transactions. It's important to keep track of every buy, sell, and trade you make, as well as any income you earn from mining or staking. Failure to report these transactions can result in penalties and legal consequences. Make sure to use a reliable cryptocurrency tax software or consult with a professional to ensure accurate reporting.
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• Dec 20, 2021 · 3 years ago
  Another mistake to avoid is not properly documenting your cost basis. The cost basis is the original value of your cryptocurrency when you acquired it. This is important for calculating capital gains or losses when you sell or trade your cryptocurrency. Keep records of the date, price, and amount of each transaction to accurately determine your cost basis.
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• Dec 20, 2021 · 3 years ago
  At BYDFi, we recommend using a reputable tax professional or software to assist with cryptocurrency tax preparation. They can help you navigate the complex tax laws and ensure compliance. Additionally, it's important to stay updated on the latest tax regulations and guidelines specific to cryptocurrency. This will help you avoid any potential mistakes and ensure accurate reporting.
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