Because so many of our customers own cryptocurrencies outside their retirement accounts as well as inside, they constantly ask us tax questions. We wanted to help them by getting them the best guidance we could find.
BURBANK, Calif. (PRWEB) March 09, 2021
BitIRA – pioneer of the first insured cold storage solution for cryptocurrency retirement accounts – published its third annual Crypto Tax Q&A earlier this month. This collaboration brings together the most frequently-asked tax questions from BitIRA’s customers as well as its newsletter subscribers and matches them with over half a dozen of the nation’s top tax experts specializing in cryptocurrencies.
Jeremy Warner, Head of Sales at BitIRA, said, “We’re doing our best to bring some clarity to a particularly murky topic.”
Accurate Cryptocurrency Tax Reporting: The Stakes Are Higher Than Ever
Indeed, in many ways, the IRS hasn’t exactly kept pace with the rapid developments in cryptocurrencies and blockchain adoption. A majority of the estimated 10% of Americans who own cryptocurrencies face a great deal of uncertainty when tax time rolls around – and with the incredible growth of crypto prices throughout 2020, the stakes of getting tax questions answered correctly is higher than ever.
“Cryptocurrencies had a huge year,” Warner said. Over the course of 2020, BitIRA’s customers saw an average of fourfold growth. That number is in line with the overall market capitalization of cryptocurrencies, which increased about 300%. Naturally, the stakes of accurate tax filing increased accordingly.
Warner explained the company’s ongoing support of this program: “While the company itself does not provide tax advice – BitIRA's customers rarely have tax concerns regarding their retirement accounts – this is an opportunity to educate the crypto community, especially given increased attention from the IRS in recent years.”
Specific Cryptocurrency Tax Concerns
One of the benefits of working within the cryptocurrency community? Making connections with specialists in a variety of related fields. “Because so many of our customers own cryptocurrencies outside their retirement accounts as well as inside, they constantly ask us tax questions,” Warner revealed. “We wanted to help them by getting them the best guidance we could find.”
Specific topics covered in the BitIRA sponsored FAQ include:
- Inactivity and reporting requirements for “buy and hold” savers
- Tax concerns for bitcoin IRA holders
- Determining if a specific transaction is a taxable event
- Taxation rates and IRS forms for taxable transactions
- Cost basis determination
- Other special considerations for cryptocurrency investors
Among other tax related content, BitIRA also has an extensive page on crypto taxes, a directory of CPA advisors from around the country who are knowledgeable of crypto taxes, and an exclusive guide on crypto taxes.
But there are simpler methods to gain exposure to cryptocurrencies.
Cryptocurrency IRA Options: “Can I Have My Own Bitcoin IRA?”
For those who want the growth potential of cryptocurrencies without tax-related headaches, BitIRA offers a turnkey service to create a crypto IRA through a rollover from most types of tax-sheltered retirement accounts, including Traditional and Roth IRAs, and eligible 401(k), 403(b), Thrift Savings Plans, and 457 plans.
According to IRS Notice 2014-21, digital currencies are treated as personal property for taxation purposes, thus making them eligible to be held as assets within a Self-Directed IRA. Rolling over existing, eligible retirement accounts into an SDIRA allows retirement savers to allocate a portion of their savings into digital currencies with zero penalty. Retirement savings are tax-deferred, and both asset appreciation and trading profits are tax-free until taken as a distribution.
“It’s amazing how many tax concerns fade when you use a cryptocurrency IRA,” Warner mused. “Even so, we plan to maintain our cryptocurrency tax guide for folks investing outside tax-sheltered accounts.”
So BitIRA plans to continue supporting this program? “Until the IRS requirements are as clear and easy to understand as the FAQ,” Warner said, then laughed. “So probably forever.”
Based in Burbank, California, BitIRA is a leading specialist in the setup and management of cryptocurrency holdings in self-directed IRAs. Founded by team members from Birch Gold Group with extensive precious metals IRA experience, the company was established on the belief that Americans should have easier access to the wide range of conventional and alternative assets available to hold in their tax-advantaged retirement accounts. Aside from facilitating the setup and management of digital currency IRAs, BitIRA advocates for public awareness of available investment options.
For more information about BitIRA or to sign up for a digital currency IRA, visit https://www.bitira.com.