As more and more people are utilizing cryptocurrency, the better the tax implications of cryptocurrency are understood. This is likely due to tax offices worldwide giving clarity on the rules and regulations, but it doesn’t mean that everyone feels confident navigating such a potentially confusing part of their finances. If you’ve made the decision to move forward with a cryptocurrency accountant as we head into tax season, it’s important to do your research beforehand. Not every accountant has the same experience and understanding of cryptocurrency, and you’ll want to find the best option to ensure accuracy. Ask yourself the following before deciding on an accountant.
Do They Already Have Crypto Clients?
Although all accountants have to start somewhere, it doesn’t mean that you need to be the guinea pig. Make sure that the accountant that you’re considering already has experience dealing with crypto tax laws and regulations. Feel free to ask them specific questions such as the percentage of their client base that are crypto investors. If your level of trade is complicated, this percentage should be on the higher side.
Do They Understand Crypto Income?
Any valuable cryptocurrency accountant knows that crypto can be taxed as either income or capital gains. If you find a potential accountant but they are unable to explain how crypto is taxed at either level, you’ll want to move on. This is especially the case if you’re dealing with staking, mining, airdrops, DeFi, etc. Despite the nuances with both capital gains and income, this is the foundation of many of the newer and more complicated transactions.
Does Your Accountant Trade Crypto?
As you become more interested (and invested) in trading cryptocurrency, you’ll want to make sure to find a cryptocurrency accountant who shares your passions. Ideally, they’ll be trading and are active in the market. The more experienced your accountant is on a personal level, the more confidence you should have that they will do an excellent job as your chosen accountant. If you’re trading at a high value or involved in niche projects, it becomes more important that your accountant has firsthand experience.
Does Your Cryptocurrency Accountant Use Crypto Tax Software?
As you likely know by now, crypto taxes are complicated for a myriad of reasons. Even the sheer volume of data and manual work that’s required to generate accurate tax totals can be overwhelming. While it’s possible to produce accurate totals by hand, ideally, your crypto tax accountant will leverage software. This allows for easy and accurate reports, giving you extra peace of mind.
Founder’s CPA Can Help
We know that as tax season quickly approaches, you might feel intimidated about finding a cryptocurrency accountant. Our team of experts at Founder’s CPA is highly experienced in this realm and can provide you with invaluable guidance this tax season. For a free consultation and to learn more, get in touch with our team at Founder’s CPA today!
