There are many places in the world in which you can save money by cutting corners. On the flip side, there are many areas in which this is a bad idea. One such instance that cutting corners can backfire is failing to hire a cryptocurrency accountant. Hiring a cryptocurrency accountant can benefit you in many ways, some of which we will explore below.
Legally Minimizing Your Cryptocurrency Taxes
Let’s be honest; crypto accounting when it comes to your cryptocurrency taxes can be daunting. From tracking your cost basis to calculating your short and long-term capital gains tax, there is no shortage of areas where it’s easy to make an error.
By engaging with a cryptocurrency accountant to perform your crypto taxes, you can rest easy and be assured that their level of expertise allows them to properly calculate your crypto taxes. In addition to properly calculating your crypto related taxes, crypto accountants can also legally minimize your crypto taxes by utilizing legal tax minimization strategies. A few examples of these strategies include tax loss harvesting and using alternative cost basis methods such as HIFO, highest-in-first-out.
Cryptocurrency Tax Audits
The second scenario in which you can benefit from engaging with a crypto accountant is for assistance regarding tax audits. In the case that you fall victim to an IRS audit, are you prepared? In this specific scenario, there are many benefits to engaging with a crypto accountant. They can clean up your crypto accounting records to ensure your filing has all the correct supporting documentation. They also have a wide breadth of knowledge when it comes to IRS audits and how the process works, leading to a more efficient and timely resolution.
Your Crypto Has Been Stolen
Crypto has seen a rapid rise in popularity and with that rise in popularity has come a rise in theft via various schemes, the most popular being phishing scams. A phishing scam occurs when you’re duped into entering your seed phrase into a website which appears to be real, but is in fact fake. This allows the person collecting your seed phrase to drain your wallets.
Should this happen to you, immediately contact the relevant authorities to report the crime. The second action to take is to reach out to an accountant with a deep understanding of crypto accounting and blockchains. Hire them to perform an audit of the transactions that occurred once your wallet is drained. They may be able to locate where the stolen crypto has gone and assist the authorities in recovering it.
Get Help with Crypto Accounting
Finding a trusted crypto accountant can be difficult. Sure you can hop on Google and find a slew of folks listing crypto as an expertise, but anyone can make this claim. Before engaging with a crypto CPA, be sure to thoroughly vet their experience by asking them in depth questions that only an expert or someone with deep knowledge of the industry would be able to answer.
At Founder’s CPA, our experts are only a phone call away. Take advantage of our free initial consultation by contacting us today!
November 22, 2023