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In the past ten years or so, we have seen crypto currency and blockchain technology rise to unprecedented heights; what started off as a dream has metarmorphosed into widespread adoption and gradual integration into our lives. The growth of these tokens have had an ostensible effect on the way we live and particularly affected our view about finaces and management. Individuals developed interest in their funds and learned new ways of investing it and reaping profit for themselves, rather than depend on sneaky banks that use our funds for profit and still charge us for saving with them.
Cryptocurrencies are assets and because of this fact, there will naturally be an amount paid as tax. In a lot of societies around the world where adoption is already at an advanced level. The creators of Cointracker realised that in such countries where the Government taxes individuals, there is a need for an efficient cryptocurrency management platform where you can have your crypto currency tax payments sorted out automatically depending on the volume of your transactions.
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Crypto Tax
Gathered from an Article on Entrepreneur.com by Scott McGovern, Founder of crypto site Blocklr & Growth Nuts, an organic growth co. You will find that cryptocurrency is treated like any other asset and the Internal revenue service are very interested in transactions done using them. The article explains that
You have to report gains and losses on all individual trades to the IRS. Specifically, exchanging a cryptocurrency for another, converting it back to USD or spending cryptocurrency are taxable events.
The article that focuses on 7 salient points about crypto currency continues that the IRS sees cryptocurrency as assets rather than currency, thus demands an amount of tax to be paid for them.
The article also points that there are two types of taxes for crypto currency; the first is Long term tax. this is as a result of holding currency for a year and then trading it while short term tax is for currency that you have had for less than a year.
Note: Just buying and holding crypto does not mean you're liable to be taxed. The only time you are going to be taxed is when you trade and use the asset as a means of earning profit by taking advantage of market trends.
Cryptocurrency can also be treated as income tax. This situation arises when the individual is paid in cryptocurrency.
Another angle is that crypto currency miners are also obligated to pay some form of tax, depending on the country in which they find themselves.
Here is some of the information a typcial crypto currency trader/earner needs to have available(source):
Determine whether you are a trader, an employee paid in cryptocurrency or a crypto miner
Create a complete list of all trades for that taxable year, including the following information. All these amounts must be calculated in USD based on the exchange rate at the time of the trade:
Trade date
How much it was paid for
How much it was sold for
The cost of doing the trade
The net gain or loss
It would be quite difficult to constanly keep all this information at your fingertips and this is why Cointracker was setup to manage this situation. The only required information is to have a vague idea about the number of transactions you make anually and a plan will be created for you for a very fair price.
The Plans
there are primarily 5 plans depending on the estimated number of transactions you make yearly or you can purchase a customise a plan that suits your activites. Here are the plans
HOBBYIST
costs $49. requires One-time payment for the 2019 tax year and covers 100 transactions
TRADER
costs $199, requires One-time payment for the 2019 tax year and covers 1,500 transactions
Here are the other plans
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Account Creation
You can easily create an account by login in with either google, your coinbase account or setting up a quick account with any other email. If you have either one then click "Getting Started" at the top of the screen to login and access your dashboard that will most likely detect your country's currency.
Account Syncing
You may choose to import your wallet details from other exchanges. It will calculate your taxes from current and previous transactions if required and present them in CSV format.
For quick access to the platform, you can download the mobile application. It is available on Android here and the Apple/IOS version here.
For more information you can visit
cointracker.io to get more information
You can also view The guide to get more information about bitcoin and crypto tax.
Reference Article
https://www.entrepreneur.com/article/324382
DISCLAIMER
This is not financial advice, nor a guarantee or promise in regards to any result that may be obtained from using the above content. The information provided here is for informational and entertainment purposes only. It should not be considered as financial and/or investment advice. No person should make any kind of financial decision without first consulting their own financial adviser and/or conducting their own research and due diligence.