If you don't report cryptocurrency on your taxes, you could be subject to a number of penalties from the IRS. You could be fined, arrested, or even have your assets seized. The IRS is very diligent in tracking cryptocurrency transactions, and they will eventually catch up with you if you don't report them.
Do exchanges report my cryptocurrency transactions?
Most exchanges report cryptocurrency transactions to the IRS. So if you're not reporting them, the IRS will eventually catch up with you. If you're caught, you could be subject to a number of penalties, including fines, imprisonment, and asset forfeiture.
The best way to report cryptocurrency on your taxes is to use specialized software that will track all of your transactions and report them to the IRS, like Ledgible Crypto Tax. This will save you a lot of time and energy, and it will ensure that you don't forget to report anything.
What happens if I forgot to report my crypto taxes in past years?
If you forgot to report cryptocurrency on your taxes, you should file an amended return as soon as possible. The sooner you amend your return, the less likely you are to face penalties from the IRS.
You can still file an amendment with the IRS anytime. They may waive some of the penalties if you can prove that it was an honest mistake. However, it's always best to report your crypto taxes as soon as possible to avoid any potential problems.
Ledgible has audit and past year reporting capabilities for all customers too, so if you have your exchanges integrated with the platform, you can quickly pull reports for past year filing.
Can you file prior year amendments with TurboTax or TaxAct?
You can file your crypto tax amendment with TurboTax online. They have a dedicated team of tax professionals who can help you through the process. Filing your taxes can be a complex and confusing process, but TurboTax can help make it easy. They have a specific form that you need to fill out, and they will help you calculate any penalties that you may owe. However, it's always best to consult with a tax professional before filing an amendment, just to be safe.
In fact, filing crypto taxes with TurboTax or TaxAct is easy with Ledgible, which produces all of the necessary forms for these platforms in minutes, automatically.
The Bottom Line:
If you don't report cryptocurrency on your taxes, you could face some serious penalties from the IRS. However, you can still amend your return if you forgot to report it in the past. It's always best to consult with a tax professional before taking any action.
