Every year, the deadline to file taxes seems to come out of left field. If you find yourself in a pinch to file your cryptocurrency taxes, you’re not alone. If you find yourself in this position this upcoming tax season, know that the IRS allows you to file for a 6-month extension to give you the additional time that you need.

As a crypto tax CPA, we’re here to help you navigate the process of filing crypto tax extensions. We’ve outlined what you should know below.

Why is an extension needed?

Filing an extension will give you an additional six months to complete your taxes. While this gives you more time to file, this isn’t a deferral if you still owe the IRS money. Keep in mind that you won’t get more time to pay what you owe; the extension is only to give you more time with the paperwork. Even if you’re not completing your tax filing, you’ll still need to pay your estimated taxes.

If you don’t owe any money on your crypto taxes, you won’t need to file an extension. However, you won’t get a refund until you do. Some people need more time to pay the taxes, and it’s possible to apply for a payment plan to give yourself more time and avoid future penalties.

For 2023, the tax deadline is April 18th. With an extension, the new filing date is pushed to October 16th. Even if you need to file late, remember that a late filing is better than no filing at all. 

Steps on extending your return

It’s important to note that each state has different rules and regulations regarding crypto tax extensions. These rules are always subject to change each year, so be sure to consult with a crypto tax CPA for guidance in this area. 

We’ve outlined a general checklist for you to follow when approaching this process:

  • Determine if your state requires additional paperwork 
  • Officially complete the extension request and be sure to keep track of your confirmation number
  • If needed, make a request with your state
  • Estimate your crypto tax obligation. This process can be tedious and tricky if you haven’t been keeping track of your transactions. This is where a crypto tax CPA can provide a lot of value to the process
  • Start to make estimated payments. If you’re unable to make the payments, you can request a payment plan with either the IRS and/or your state
  • Complete your tax filing by the deadline to avoid the penalty for filing late

Get help from a crypto tax CPA

If you’re considering filing a crypto tax extension this year, you don’t have to go through the process alone. We know that it can be overwhelming to navigate cryptocurrency if you’re not well-versed in this area. Our experts at Founder’s CPA are here to help you through the above steps and ensure your filings are accurate. Take advantage of our free initial consultations to get started. 

Curt Mastio
Post by Curt Mastio
November 22, 2023
Curt Mastio started Founder’s CPA in 2017 and currently serves as the Managing Partner of the firm. After obtaining both his Bachelor’s and Master’s degrees in accounting from the University of Illinois in Urbana-Champaign Curt started his career in Big Four public accounting. Shortly thereafter Curt served as the Chief Financial Officer of Storage Squad began his stint as an Adjunct Instructor at Northwestern University’s Farley Center for Entrepreneurship and has been teaching Accounting & Finance to undergraduate students for 6+ years. In his current role Curt oversees strategy, operations, and business development at Founder’s CPA. Further, Curt has experience working directly with 200+ startups and small businesses providing accounting, tax, and outsourced CFO services. His industry expertise lies in the SaaS, Blockchain, Marketplace, and Fintech industries. He has served as a key advisor working directly with startups that range from pre-revenue to companies generating over $30 million dollars a year in revenue. Lastly, he serves a key role working directly with the firm’s clients that have collectively raised over $200 million in venture capital funding to date. Curt is also an active advisor, mentor, and investor in the startup ecosystem. He has facilitated numerous workshops, webinars, and presentations to incubators and other startup-centric organizations. He is also an active mentor for Techstars in both Chicago and Iowa. Outside of his daily professional duties Curt is actively involved with Beat the Streets Chicago and was a founding member of its Young Professionals Board. His efforts in both leadership and community involvement were recognized when he was awarded the Illinois CPA Society’s Outstanding Young Professional Leadership Award in 2020. He was also a panelist at their annual conference in 2022 where he spoke about his experiences starting and operating a public accounting firm. He maintains an active Certified Public Accountant designation that he obtained in 2014. Outside of work, Curt can be found spending time with his friends & family including his dog Rufus. His hobbies include golf, boating, cooking, reading, and attending sporting events & concerts.