Cryptocurrency futures exchange Deribit has partnered with CryptoTaxCalculator in a bid to simplify tax reporting for traders. The CTC tool is easy to use and can directly import transaction data from Deribit and automatically generate your tax reports.
With tax season upon us, the deadline being May 17 for US citizens, CryptoTaxCalculator has an enticing deal to ease the pain of self-reporting. Using the code DERIBIT_40, you can get a 40% discount on CryptoTaxCalculator’s annual subscription.
CryptoTaxCalculator Soothes Your Tax Blues
CryptoTaxCalculator helps you prepare your books stress-free without the need for an accountant. It supports over 100 exchanges and non-exchange activities such as airdrops, staking, mining, ICOs, and other defi activities. CryptoTaxCalculator’s automatic categorization algorithm ensures each transaction’s tax is calculated accurately.
CryptoTaxCalculator offers a wide variety of annual subscriptions with its Rookie package starting at $49 and its ultimate package, Trader, coming in at $299. Each package is designed to offer maximum utility based on the number of trades. As a result of the firm’s latest partnership, Deribit users will save precious time and be able to calculate their taxes with ease.
How To Make Crypto Taxation Work For You
When it comes to calculating crypto tax, it should be noted that in many countries, cryptocurrencies are treated as securities. This means that you can be liable for both capital gains and income tax depending on the type of cryptocurrency transaction and your individual circumstances.
CryptoTaxCalculator supports FIFO, HIFO, and LIFO inventory costing. Cryptocurrency is an asset and depending on your inventory method you can potentially save some money.
The next thing to be aware of is tax loss harvesting. As a trader it is inevitable that you are going to make losses. The upside is that because cryptocurrencies are assets, you can harvest your losses and therefore pay less taxes and get back to your position. Nifty, right?
Third, account for the cost basis of your returns. Again, CryptoTaxCalculator comes to the rescue here. It automatically matches the value of your trades to the dollar price at the time of the trade. This accounts for inflation which most would forget to account for. Also, their support for non-exchange activities, such as mining and staking, makes tax calculation for qualified business expenses simple.
Hope For Hardcore Hodlers
If you’re holding cryptocurrency long term, you may wish to consider investing in a SDIRA, life insurance policy, or donating some of your crypto to charity. An SDIRA defers taxes until retirement and you will qualify for less taxes. A life insurance policy is generally exempt from taxes and your heirs will thank you for it. Finally, donating to charity will exempt you from paying taxes on the capital gains of the donated property and you get a tax deduction equivalent to the fair market value of the asset at the time of the donation.
A final tip for tax reduction is to get married. In certain countries, there is a little known 0% tax rate for long-term capital gains. The eligibility for this 0% tax rate depends on your filing status, annual income you make, and how long you kept the cryptocurrency before selling it. If you’re married and you file jointly, you could qualify for a 0% return for up to $80,000.
Alternatively, you could just move to Puerto Rico. The country is free from federal taxation and has its own tax laws. With some manoeuvring, you can qualify for tax-free cryptocurrency trading profits.
Outlandish as some of these strategies may sound, at the end of the day, it’s essential to determine how much you need to pay in taxes. Then, you can ascertain whether getting hitched and moving to the Carribean is the best approach, or whether plugging in CryptoTaxCalculator will provide a less drastic solution.
