How to Reduce Your Crypto Tax Bill Before Year-End 2022

Crypto investors can now calculate their net tax for all transactions from 2022 using Accointing’s crypto tax software.

Despite the fact that 2022 has been a year to remember for most crypto investors, filing crypto tax returns by December remains a daunting task. In addition to worrying about unrealized losses on their crypto portfolios, North American investors could face IRS penalties if they fail to report crypto assets and transactions on their tax returns.

As part of cryptocurrency portfolio tracking and tax filing, Accointing by Glassnode offers an easy solution for importing and reviewing all crypto transactions, as well as filing your crypto taxes, with just a few clicks. In addition, it offers a tax loss harvesting tool that helps investors reduce their tax liabilities.

What is the best way to optimize your crypto tax return?

A significant price erosion has occurred in most crypto assets in 2022, particularly Bitcoin. Some crypto investors may be tempted to underreport their income to reduce their tax bill. US crypto investors, however, need to understand all tax provisions available and utilize them to maximize their tax liability. Such an approach would invariably result in punitive actions being taken by the IRS.

Suppose, for example, that losses accrued while selling crypto assets exceed capital gains earned by selling profitable positions. In that case, investors can deduct up to $3,000 against ordinary income and carry forward any remaining losses to the next accounting year. Any excess loss can then be offset by any future capital gains.

Additionally, investors can sell digital assets at lower prices than their acquisition costs, then buy them back within the same year at a lower price. Although the IRS has excluded stocks and securities from this tax-saving tactic, crypto assets are not treated similarly. As a result, realized loss can be used to offset any capital gains tax while allowing investors to maintain their net holdings.

Introducing Accointing’s universal crypto tax calculator

The majority of crypto tax calculator providers charge a monthly fee, making these tools unaffordable for most retail crypto investors.

Its comprehensive crypto tax calculator is available for free until Dec. 31, 2022, so you can see how much you can save on taxes this year by using Accointing’s portfolio tracking and compliance solution.

Using the tax loss harvesting tool, investors can review which crypto tokens to sell in order to offset any capital gains, making tax loss harvesting a simple activity. Accointing’s crypto tax calculator generates accurate tax reports for portfolios containing up to 50,000 transactions in a calendar year with just five clicks, so you can get an accurate tax report for transactions happening within 2022 with just five clicks.

With just days left before the close of 2022, Accointing’s crypto tax software can save crypto investors a lot of hassle and help them maximize their tax returns by using its tax loss harvesting tool. As a result of Accointing’s acquisition by Glassnode in October 2022, its users will gain broader investment intelligence insights.

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