What are the most common TurboTax errors when filing cryptocurrency taxes?

5 answers

• Dec 18, 2021 · 3 years ago
  One of the most common errors people make when filing cryptocurrency taxes with TurboTax is failing to report all of their transactions. It's important to remember that every buy, sell, and trade of cryptocurrency needs to be reported to the IRS. Another common mistake is not accurately calculating the cost basis of their cryptocurrency holdings. This can lead to incorrect reporting of gains or losses. Additionally, some people forget to include any income earned from staking or lending their cryptocurrencies. It's crucial to include all sources of income when filing taxes.
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• Dec 18, 2021 · 3 years ago
  A common error that people make when using TurboTax for cryptocurrency taxes is not properly categorizing their transactions. TurboTax provides different categories for different types of transactions, such as buying, selling, and trading. It's important to accurately categorize each transaction to ensure accurate reporting. Another mistake is not keeping track of the dates and times of each transaction. This information is needed to calculate the holding period and determine whether the transaction qualifies for short-term or long-term capital gains tax rates.
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• Dec 18, 2021 · 3 years ago
  At BYDFi, we've noticed that one of the most common TurboTax errors when filing cryptocurrency taxes is not reporting transactions from multiple exchanges. Many cryptocurrency traders use multiple exchanges, and it's important to report all transactions from each exchange. Another common mistake is not properly reporting airdrops and forks. These events can result in taxable income, and failing to report them can lead to penalties. It's important to stay informed about any airdrops or forks that you may have received.
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• Dec 18, 2021 · 3 years ago
  When it comes to filing cryptocurrency taxes with TurboTax, one common error is not properly reporting losses. If you experienced losses from cryptocurrency investments, it's important to report them accurately. These losses can be used to offset any gains and reduce your overall tax liability. Another mistake is not keeping proper records of your transactions. It's important to maintain detailed records of all your cryptocurrency transactions, including dates, amounts, and transaction fees.
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• Dec 18, 2021 · 3 years ago
  One of the most common errors people make when using TurboTax for cryptocurrency taxes is not seeking professional help when needed. Cryptocurrency taxes can be complex, especially if you have a large number of transactions or engage in advanced trading strategies. Consulting with a tax professional who specializes in cryptocurrency taxes can help ensure that you are filing correctly and taking advantage of any available deductions or credits. Don't hesitate to reach out for assistance if you're unsure about any aspect of your cryptocurrency taxes.
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