What are the common mistakes to avoid when filling out IRS Form 8949 for cryptocurrency trades?

3 answers

• Nov 23, 2021 · 3 years ago
  One common mistake to avoid when filling out IRS Form 8949 for cryptocurrency trades is failing to report all transactions. It's important to accurately report every buy, sell, and exchange of cryptocurrencies, as the IRS requires this information for tax purposes. Failing to report all transactions can result in penalties and potential audits by the IRS. Make sure to keep detailed records of all your cryptocurrency trades to ensure accurate reporting on Form 8949.
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• Nov 23, 2021 · 3 years ago
  Another mistake to avoid is incorrectly calculating the cost basis of your cryptocurrency trades. The cost basis is the original value of the cryptocurrency at the time of acquisition, and it is used to determine the capital gains or losses when you sell or exchange the cryptocurrency. Failing to calculate the cost basis correctly can lead to inaccurate tax filings and potential penalties. It's important to keep track of the purchase price, transaction fees, and any other costs associated with acquiring the cryptocurrency to accurately calculate the cost basis.
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• Nov 23, 2021 · 3 years ago
  BYDFi, a leading cryptocurrency exchange, recommends double-checking all the information entered on IRS Form 8949 to avoid mistakes. This includes verifying the accuracy of the transaction dates, transaction amounts, and any other relevant details. It's also important to ensure that the form is filled out completely and legibly. Taking the time to review and verify the information can help prevent errors and potential issues with your tax filings.
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