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Cryptocurrency and Taxes Getting Ready for 2022 Taxes
One of the first things you need to do in order to prepare your 2022 taxes is to organize each of your cryptocurrency transaction into purchases and sales.
The purchases will not matter when it comes to your personal income taxes, however the sale and classification of EACH transaction will. You will need to know the exact date you purchased the cryptocurrency, for how much and the exact date you sold the currency and for how much. You place this information on Schedule D based on long-term or short-term investment.
Now if you only did one or two sales or exchanges, no problem. But for you day traders, your work is cut out for you.
Your Short- and Long-Term Gains Report can be calculated and created within moments. Yes, it will cost you for the easy, fast performance, but time is money. If you have the time then research each sale and record sale date price of profit or loss, purchase date and price of purchase for EACH transaction. This will serve as the basic foundation for your cryptocurrency reporting requirements for the Department of Treasury.
Stay tune for more videos on what comes next after you prepare the Short and Long Term Gains Report. We will be discussing IRS Form 8949 and Schedule D which are also included in the cryptocurrency component of your tax return.
