Time To Report Your Crypto Gains
You should feel proud of yourself, porque instead of spending your days getting the newest intel from your primas and their love lives, you finally got hooked on some chisme that is worthy: Latinos have started to notice that we have an unprecedented opportunity to start our wealth building journey by investing, and once we began researching, we realized that Crypto is an appealing investment to many these days..
It does make sense when even your mom wants to know what is that Bitcoin “thing” everyone keeps talking about. Pero we know for a fact that explaining it is definitely more complicated than deciphering el horóscopo… way more.
Let’s restate what we all know so far: Cryptocurrency is digital money. Basically, it’s anonymous “coins” or “tokens” that get “mined.” All of the transactions are secure and secret and they exist on what’s called “blockchain”. You know how your abuela had a thing called a checkbook that she balanced? Well the blockchain is the ledger that has all the info on the transactions.
Great, now that we’re sure we are all on the same page, here’s an important follow up question: do you know how to report them on your taxes?
Bueno, to be fair, all of this Cryptocurrency frenzy is brand new and most people are still adjusting to it. However, seeing Latinos asking, researching and learning feels refreshing, as if the game of wealth building can finally turn in our favor. But let’s not forget that we have to make sure we are also aware of the next steps.
If you traded Crypto, sold stocks or have rental income, whether you’re doing your taxes yourself or working with a tax expert, our amigos at @turbotax have info to help you navigate tax season and stay afloat! Remember the deadline to file your taxes was moved to May 17th, so if you still have questions now it’s a good time to answer them. ¡Ponte las pilas!
By the way, our @turbotax amigos have also hooked up our community by offering a limited number of codes to use TurboTax for FREE! 🙌🏽😉 Whether you have investments or not, it’s time to let all of the familia know so we can get our taxes done once and for all! That’s a chisme worth spreading around.
Echale un vistazo al TurboTax bilingual blog https://blog.turbotax.intuit.com/ to find most of your investments tax answers and other tax-related topics in English or Spanish.
Want to know how to enter? Check out our instagram post HERE.
And in case you’ve got more questions…
As soon as we started talking about how Latinos can declare our gains on Crypto and other investments, there were a lot of people from our comunidad reaching out with their questions.
TurboTax answered your two most common tax-related investing questions during our Crypto Dinero Session.
- How much should one set aside from each sale to cover the taxes?
- How much you set aside for taxes will depend on several factors:
- First, how long you’ve held onto the asset before you sell it and your tax bracket.
- If you’ve held onto the asset longer than a year before selling you will be taxed at Long Term Capital Gains rates based on your taxable income, so you should set aside taxes based on your long term capital gains tax rate according to your taxable income
- Long-Term Capital Gains rates are 0%, 15%, and 20%
- If you’ve held onto an asset for one year or less before selling you will be taxed at Short-Term Capital Gains rates based on your taxable income so you should set aside taxes based on your short-term capital gains tax rate according to your income.
- Short-Term Capital Gains rates are the same as the ordinary rates you pay on your taxable income like wages. Short-term rates are 10%, 12%, 22%, 24%, 32%, 35%, 37%
- You can use TurboTax Capital Gains Calculator to easily figure out how much taxes to set aside.
So how much money you need to save in your cochinito for your taxes depends on things like: How long you’ve held your investment for or your tax bracket, pero the calculator can help simplify the process for you and give you a more accurate number!
- Why do I have to pay taxes on a decentralized currency?
- In 2014 the IRS issued guidance and explained that virtual currency should be treated as property instead of currency for Federal income tax purposes and applied tax principles applicable to transactions involving property to virtual currency.
Pues this means for the purposes of taxes, if your tía or abuelita are participating in the Crypto game, make sure they know the IRS views cryptocurrencies like property and don’t treat them like regular dinerito.
’Ta useful, no?
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