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IRS: Tax returns and Bitcoin profits

Bitcoin has really taken off in the last few years, with more Americans participating in trading. Now they want to know, do they need to report profits to the IRS on tax returns?

cryptocurrency like bitcoin, which needs to be reported to the IRS

When cryptocurrency first began, it was relatively unregulated, which made it so popular. Not being regulated meant not have to pay taxes on earnings.

In 2022, that is no longer the case.

Today if you trade in the cryptocurrency market, you need to pay taxes on your earnings or the IRS will come after what you owe.

IRS: Cryptocurrency counts as property when filing taxes

IRS and the cryptocurrency market

The IRS has spent a few years figuring out the best way to handle cryptocurrency.

Those who mine cryptocurrency need to report their earnings or risk facing losing money and time fixing their tax liability.

The IRS recognizes cryptocurrency as property, so they’re taxed similarly to stocks.

Finger Lakes Partners (Billboard)

Standard deduction for 2022 tax year

If you haven’t actually cashed out but have left the crypto in your digital wallet, you do not need to report your earnings for 2022.

If you trade one form of crypto for another then you will be taxed.

You’ll also be taxed for buying goods and services like food or coffee with crypto.

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