If you have used Binance or Binance US to buy, sell, trade, or do anything else with cryptocurrency in the last year, you're unfortunately obligated by the IRS to file taxes. If you're trying to figure out how to file taxes for your Binance transactions, we'll take you through the process in this quick guide.
You can automatically generate your gains, losses, and income reports for your Binance account by connecting it with the Ledgible crypto tax platform. You have a few options if you'd like to connect with Ledgible:
- Sync your finance account with Ledgible via our API connection. This will allow you to quickly bring in all of the necessary data with ease.
- Or, you can manually upload your transaction history via CSV file into Ledgible, which will take that data and compile it for necessary tax reporting.
Both of the above methods will work for crypto consumers looking to use TurboTax, Tax Act, or any other cryptocurrency tax software.
Understanding cryptocurrency Taxes
Cryptocurrencies are treated like property by the IRS and other government organizations inside and outside the US. This ultimately means that in most places around the world, you are expected to file cryptocurrency taxes under existing tax law. If you'd like to understand more about the entire cryptocurrency tax process, you can read our guide here.
How do I calculate my taxes?
Now, it's time to calculate your taxes. Calculating your cryptocurrency taxes for 2031 is tricky because the industry is so young and the IRS has yet to release many official guidelines. You have two choices here, you can use an automated service or you can do it manually.
With cryptocurrency, manually filing your taxes on the thousands of non-standard transactions, transfers, trades, and more can become a headache quite quickly. Your best bet is to use an automated crypto tax service to get started. Luckily, Ledgible has you covered, and you can get started calculating (and minimizing) your tax bill without spending a dime.
Does Binance provide tax forms?
Starting in 2024, all cryptocurrency exchanges will be required to send out 1099s and other IRS related forms for cryptocurrency transactions and trades. Until then, Biance and other exchanges often don't send 1099s to users. Also, if you use any platform s outside of finance, in conjunction with the crypto platform, your tax forms from Binance alone won't be enough to give a complete tax picture for your situation.
For example, tax forms from Binance will show a transfer to another wallet as a sale, whereas you know this was simply a movement of cryptocurrency and you hold the asset. It's this complicated decentralized nature that necessitates the use of a crypto tax and accounting solution like Ledgible.
