What are the common mistakes to avoid when filling out a 1099-B form for cryptocurrency?

7 answers

• Feb 18, 2022 · 3 years ago
  One common mistake to avoid when filling out a 1099-B form for cryptocurrency is failing to report all transactions. It's important to include every buy, sell, and exchange of cryptocurrency, even if the amounts seem small. The IRS requires accurate reporting of all cryptocurrency transactions, so make sure to keep detailed records and double-check your entries.
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• Feb 18, 2022 · 3 years ago
  Another mistake to avoid is misclassifying cryptocurrency transactions. Different types of transactions, such as buying, selling, or exchanging cryptocurrency, may have different tax implications. Make sure to understand the tax rules for each type of transaction and report them correctly on your 1099-B form.
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• Feb 18, 2022 · 3 years ago
  At BYDFi, we recommend using a reputable tax software or consulting with a tax professional to ensure accurate reporting on your 1099-B form. They can help you navigate the complexities of cryptocurrency taxation and avoid common mistakes that could trigger an audit or penalties.
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• Feb 18, 2022 · 3 years ago
  When filling out a 1099-B form for cryptocurrency, it's crucial to report the correct cost basis for each transaction. This includes the original purchase price of the cryptocurrency, any fees or commissions paid, and any adjustments for splits or forks. Failing to report the correct cost basis can lead to inaccurate tax calculations and potential penalties.
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• Feb 18, 2022 · 3 years ago
  One mistake that many people make is forgetting to report cryptocurrency received as income, such as mining rewards or airdrops. Even if you didn't actively buy or sell cryptocurrency, you may still need to report it as income on your 1099-B form. Make sure to keep track of any cryptocurrency received and consult with a tax professional if you're unsure how to report it.
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• Feb 18, 2022 · 3 years ago
  It's important to review your 1099-B form for accuracy before submitting it. Check that all the information is correct, including your personal details, transaction dates, and amounts. Mistakes or discrepancies on your form can raise red flags with the IRS, so take the time to carefully review and double-check your entries.
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• Feb 18, 2022 · 3 years ago
  Remember, the IRS is cracking down on cryptocurrency tax evasion, so it's crucial to report your transactions accurately and honestly. Failing to do so can result in penalties, fines, or even legal consequences. If you're unsure about how to fill out your 1099-B form for cryptocurrency, seek professional advice to ensure compliance with tax regulations.
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