Cryptocurrency investors, both new and seasoned, can benefit from engaging with a crypto tax CPA to assist with the filing of their cryptocurrency taxes. Whether you’re holding your assets for the long-term or you prefer day trading, there is no shortage of complexities when it comes to filing your cryptocurrency taxes. 

When selecting a crypto CPA to handle your transactions, it’s important to first determine their level of expertise. Here, we’ll cover common questions an expert crypto tax CPA should be able to answer.

Regulatory Agencies

You’ll first want to gain an understanding of how well your crypto tax CPA stays on top of the most up-to-date news from regulatory agencies. This is of the utmost importance as the cryptocurrency landscape and related regulations are constantly shifting. It’s critical you engage with a professional who is on top of the latest regulatory changes.

Questions you can ask to ensure this person is up to date with the latest regulations include:

  • How does the IRS treat crypto for tax purposes?
  • Does the IRS tax staking as income?
  • If I earn cryptocurrency rewards through my credit card, are those rewards taxable income?
  • Is wrapping cryptocurrency a taxable transaction?

These are critical questions that qualified crypto tax CPAs should know. Failure to understand these standard yet complex regulations can lead to incorrect tax filings.

Tax Liability Calculations

Once you have reasonable assurance that your potential CPA has sufficient knowledge of cryptocurrency tax law, you’ll next want to inquire about their use of software in the process of filing your cryptocurrency taxes.

While not essential, cryptocurrency tax software greatly enhances the cryptocurrency tax reporting process. These software options can do everything from assisting in reconciling your transactions to ensuring none of them are missing. They can also generate different tax reports based on different cost basis scenarios. This is essential as changing the cost basis method for your tax lots can drastically change the tax liability that’s due. You’ll want to engage with a crypto CPA who is familiar with the software in addition to the cost basis methods that the IRS allows.

Questions you can ask your crypto tax CPA to ensure they are using appropriate software in the crypto tax liability calculation include:

  • Does the software used allow for the calculation of tax liability scenarios using different cost basis methods?
  • Does the software offer any reconciliation tools to ensure no transactions are missing and all necessary information for each transaction is present?
  • Does the software include any features or alert capabilities to flag transactions with potential errors for review?
  • Does the software generate the necessary back up / detail to support tax filings?

These tools greatly reduce the risk associated with an incorrect filing and a less-than-optimal tax liability calculation.

How Our Experts at Founder’s CPA Can Help

If you’re in need of cryptocurrency accountants in Chicago and surrounding areas, our team at Founder’s CPA is here to help. We have over $500 million in tracked crypto and we’ve supported over 100 different assets. If you’re interested in a risk-free assessment with one of our experts, get in touch with us today.

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.