Tax season is here, and it’s time once more, to sharpen those pencils and go through the IRS’s mountains of forms. While Amazon pulled in $11.2 billion as profit in profit in 2018 is going to pay zero in federal taxes, every Bitcoin investor is expected to pay the taxman or face the law.
Procrastinators with extensions, however, are in for a tasty treat because they can choose to be part of the inaugural crypto user group, going to receive Bitcoin for their state income and federal tax refunds.
Occasioned by a joint endeavor between BitPay and Refundo taxpayers can now earn their BTC through Payout’s from BitPay, the world’s largest crypto payment provider. Refundo is a market leader in tax-based financial products and has put measures in place that enable taxpayers on its platform to receive in full or part of their refunds in Bitcoin through its CoinRT tool. Rolf Haag, BitPay’s Head of Business Solutions said this of their joint venture with Refundo:
“We are thrilled to power Refundo’s CoinRT product. Refundo can now offer their customers a Bitcoin Payout for their tax refunds, meeting their customers’ demand for a more digital choice.”
Refundo’s platform is much focused on speed of low-cost transactions for the unbanked and has created its users a smooth and seamless experience for the otherwise convoluted tax process. Refundo’s CEO Roger Chinchilla had this to say:
“Adding Bitcoin was a natural fit for our customers who often do not have traditional checking accounts, pay high check cashing fees and regularly send money internationally. CoinRT enables them to get Bitcoin quickly and easily for one flat fee.”
As the global rise in demand for cryptocurrencies rises, the venture between BitPay and Refundo will enable faster, quicker and transparent large payment systems. The platform is a much better alternative to high-cost bank wires or debit cards.
The Cryptocurrency Tax Debacle
The current tax code has more than 10 million words to it, and pouring through the jargon-filled rule book to comply with the IRS ‘s tax demands is a challenging venture. Throw in crypto tax and the entire process becomes a minefield. Pat Larsen, ZenLedger’s CEO describes cryptocurrency taxing as “one of the most complicated areas of tax law.” Every digital coin holder has to track their crypto activities to document a token portfolio for tax purposes correctly.
The tax man views crypto assets more as intangible property or stock rather than currency. Digital money is also subjected to wash-sale rules to prevent taxpayers from gaming the system. A crypto holder, therefore, has to keep in mind the dates and costs of tokens purchased, the gains or losses to help report their tax numbers correctly as mandated by Form 8949.
The government, therefore, expects investors to trade their crypto to help pay taxes. The IRS expects all gains reported and paid in dollar form even when trades are crypto-to-crypto. This, therefore, could force crypto owners to actually sell off some of their tokens, to pay the IRS with acceptable fiat money. The whole process can be complicated and ridiculous, especially since Bitcoin stands for decentralization of money. Some of the IRS’s expectations are very difficult to comply with because, for instance, it is hard to account for all airdrops or forks.