The compliance-minded Gemini crypto exchange has partnered with Taxbit to make doing taxes with crypto easier.
The Taxman Integrates With Gemini
Gemini will integrate tax-calculating software into their platform, the exchange has said in a press release.
The aim of the technological addition is to help users with confusing and laborious tax reports. Though the company wants to “optimize” tax reporting, it’s likely they want to encourage users to report taxes upfront. Gemini has been a compliant-minded exchange and fought to gain recognition from regulators.
As for the software, Gemini will work with Taxbit, an accounting service that offers enterprise solutions to a variety of companies. Taxbit’s CEO, Austin Woodward, seemed ready to take on the challenge of taxes in cryptocurrencies, commenting:
“We are excited to partner with Gemini in order to bring industry leading tax technology to Gemini’s platform. Gemini is making crypto taxes, something that historically has been viewed as intimidating and complex, simple.”
Once the new software is implemented, Gemini says users will be able to download a tax report that will be compatible with tax filing software. Indeed, the software should be usable at any time beyond only the tax season.
IRS in the Picture
In recent weeks, the US Internal Revenue Service (IRS) has set its sights on cryptocurrency transactions and tokens. Soon, questions about crypto will be front and center on tax returns next year. Likewise, the IRS is actively working with crypto companies and putting crypto exchanges under greater scrutiny.
The nature of the IRS’s tax return forms for 2020 is not entirely clear. However, some early drafts allow users to hold or transfer crypto between their own wallets without reporting it to the government. Apparently, users can maintain their anonymity and be compliant if they do not trade.
According to draft instructions released by the IRS on Oct 23rd, If you just held crypto on a wallet/account and/or transferred crypto between wallets/accounts you own during 2020, you do NOT have to disclose this to the IRS by checking "yes"
— Shehan Chandrasekera, CPA
| | (@TheCryptoCPA) October 25, 2020
While filing taxes over crypto transactions may be complicated, traders need to be aware that the US government is paying attention and the charges can be serious. Crypto advocate John McAfee was arrested in Spain in Oct 2020 over tax evasion in the US.
Death and Not Paying Taxes
Crypto wasn't made for more third-party interest. It's about self-governance. Not paying extreme taxes to spend your crypto held by a multi-billion dollar corporation.
— Crypto Homer [w/ hair] (@cryptogramz) October 28, 2020
Few pay their taxes with enthusiasm, but some in the crypto world are more resistant than others. As the bankless possibilities that crypto brings have attracted libertarian and small-government minded followers, some see paying taxes as counter to the “vision” of crypto or Bitcoin.
One company has gone far enough as to plan a floating crypto-ship for international waters. Ocean Builders has purchased a cruise ship that it hopes will one day become a tax-free seasteading colony.
One Twitter user, WestCoastCrypto, put their point of view simply: Taxation is theft.
It blows me away how many people involved in crypto are concerned about paying their crypto taxes. TAXATION IS THEFT.
— WestCoastCrypto (@Gematria1001) October 28, 2020