The IRS allows expats and US residents living out of the country an automatic 2-month extension.Singapore, June 13 (Bernama-GLOBE NEWSWIRE) --
If you forgot to pay taxes on your cryptocurrency capital gains back in April but you happened to be living and working outside of the US, you have a second chance. The IRS offers an automatic two month extension
, giving you until June 15 to file any taxes that you did not file on or before April 17.
To qualify for the extension, you must be a US citizen or resident alien and, on April 17 (or the regular due date of your return), you were living and working outside of the US and Puerto Rico. If you do qualify for the extension, you will avoid having to pay late filing and late payment penalties but you will have to still pay interest on your tax accumulated since April 17.
You may have already filed and paid your taxes in April, but you didn’t realize that you also need to declare your cryptocurrency earnings. That situation is not uncommon - most exchanges do not send users a 1099 tax form and tax filing websites like TurboTax and H&R Block don’t ask if you sold cryptocurrency in the previous year. It is up to individuals to stay proactive and inform themselves of new tax laws.
If the IRS catches you not paying taxes, common fees include a “substantial understatement” penalty and “negligence or disregard of the rules” penalty, which are an additional 20 percent
of the net understatement of tax. And if the IRS thinks you knowingly and intentionally did not pay your tax, it will charge you an additional 75 percent for committing fraud.
If you do eventually pay tax on your cryptocurrency capital gains but don’t do it by April, or June if you qualify for the automatic extension, you will incur a late payment penalty and a late filing penalty
. The late payment penalty is 0.5 percent of your unpaid taxes per month since the due date and can incur up to 25 percent if left unpaid. It gets even worse if you don’t file at all. The late filing penalty is 5 percent per month with a minimum of $210 and a maximum of 25 percent. That means if you never file and pay, you could owe the IRS an additional 50 percent of the taxes you already owe on your cryptocurrency capital gains!
Now that you’ve decided to file crypto taxes
, how do you do it?
In the US, cryptocurrencies are treated by the IRS as property
, similar to stocks. This means that you must pay capital gains on your investments that you have sold and basic income tax if mining or earning cryptocurrency for work.
Our recommendation is to use Get Crypto Tax
because it is cheap, user-friendly, and safe.
Founded in 2018, Get Crypto Tax aims to be the market leader in crypto tax preparation software by focusing on customer value and quality of user experience. The company was formed by crypto trading expert
Ian Hafkenschiel when he realized that the rising prominence of cryptocurrency creates the need for tools to help traders stay compliant.
The website provides illustrated, click-by-click tutorials to help you to easily extract your trade data from exchanges. It then calculates your capital gains or losses for free. And for $10, you can download spreadsheets to give to your accountant or import into online software like TurboTax. With the tax deadline upon us, head over to GetCryptoTax.com before it is too late.
Disclaimer: This is not intended to be tax or legal advice. Please consult your own tax and legal professionals. About GetCryptoTax
GetCryptoTax is a website that helps you calculate capital gains on your cryptocurrency trades so that you can file your taxes. The site provides user-friendly tutorials to help you easily upload exported spreadsheets from your cryptocurrency exchanges. For more information, please visit http://www.GetCryptoTax.com/