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Accounting Industry Rushing Into Cryptocurrency

CPAs are late to the game but also rushing into the cryptocurrency space. As an industry leader in cryptotax services I have been able to observe how this niche sector is developing.

It is not out of the ordinary for me to get targeted with ads from various franchise organizations to “double my accounting fees” by offering crypto tax services with no prior experience. This catches me off guard.

I can only picture how investors are navigating this maze of service offerings and distinguishing from CPAs that have financial services experience and an understanding of crypto between CPAs that have just hopped on this bandwagon.

Analyzing financial transactions are a detailed process that can easily be plagued with costly errors if you do not have a structured process and workflow in place. Analyzing crypto transactions adds another layer of complexity due to the nascency of this industry and the reporting standards from exchanges.

Many CPAs are using a back-offices from another company to actually analyze an investors’ portfolios and do not understand this process. Without the proper experience and training it is very easy for well-meaning accountants to make costly errors related to the portfolio calculations and advisory they provide investors.

Be careful and do you due diligence. At the end of the day your tax return is your responsibility and it is your job to work with an experienced CPA firm to protect your assets.

I would suggest that investors work with a CPA that not only understands and invests in crypto but also a CPA that has a strong background in financial services.

Here at Camuso CPA, we offer a wide array of tax and accounting services for cryptocurrency investors and traders including tax preparation, tax planning and portfolio reconciliations.

If you searching for experienced CPA firms to assist you with reporting cryptocurrency income and capital gains, contact Camuso CPA. Whether you need tax preparation services related to bitcoin transactions, assistance with properly reporting gains and income from cryptocurrencies on your taxes, cryptocurrency portfolio analysis, or any other tax and accounting service, Camuso CPA can help

If you searching for experienced CPA firms to assist you with reporting cryptocurrency income and capital gains, contact Camuso CPA. Whether you need tax preparation services related to bitcoin transactions, assistance with properly reporting gains and income from cryptocurrencies on your taxes, cryptocurrency portfolio analysis, or any other tax and accounting service, Camuso CPA can help

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Overstock First Company To Pay Taxes In Cryptocurrency

Overstock, the US online retailer, announced that it will pay a portion of its business taxes in Ohio in Bitcoin.

Earlier in November, the state of Ohio opened a cryptocurrency portal that allows businesses to pay 23 different taxes with the digital currency, ranging from cigarette and tobacco to fuel and sales taxes.

Overstock will pay its eligible commercial activity taxes (CAT) via OhioCrypto.com site starting from next month. Businesses interested in paying their taxes in bitcoin can do so after registering with the new website and signing up with crypto payment processor BitPay.

Do not forget that paying taxes or spending cryptocurrency in any other form is also potentially a taxable event.


Whether you need tax preparation services, assistance with properly reporting gains and income from virtual currencies on your taxes, cryptocurrency portfolio analysis, or any other service provided by a certified accountant, Camuso CPA can help.

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Tax Implications of Paying Your Employees in Cryptocurrency

Here at Camuso CPA, we offer a wide array of tax services for cryptocurrency investors and traders including tax preparation, tax planning and portfolio reconciliations.

If you’re thinking about paying your employees in a cryptocurrency such as Bitcoin or if you are an employee interested in receiving it as a portion of your pay, there are a few tax implications you need to consider before doing so.

The IRS treats cryptocurrencies as property. Simply holding cryptocurrency, whether it has gained value or lost value, does not mean that you owe taxes. In order to owe taxes, you would have to sell cryptocurrency, trade for another cryptocurrency, or purchase something with it. These are known as taxable events.

This means that if a business uses cryptocurrency as a payment method for employees that there are multiple tax implications. Based on the company’s holding period and cost basis they will be exposed to capital gains liabilities when they use their assets to pay employees. They will still be able to report the employee’s payment as a business expense which is beneficial for taxes.

A taxpayer who receives digital currency as payment for goods or services must, in computing gross income, include the fair market value of the virtual currency, measured in U.S. dollars, as of the date that the virtual currency was received. If a virtual currency is listed on an exchange and the exchange rate is established by market supply and demand, the fair market value of the virtual currency is determined by converting the virtual currency into U.S. dollars (or into another real currency which in turn can be converted into U.S. dollars) at the exchange rate, in a reasonable manner that is consistently applied.

According to the IRS, all payments paid to employees are subject to income withholding requirements regardless of what form of payment the business uses to pay the wage.  Therefore, the fair market value of an employee’s cryptocurrency earnings must be included on that employee’s W-2 form, and these wages will also be subject to federal income tax withholding, Federal Unemployment Tax Act, and Federal Insurance Contributions Act requirements that apply to property-backed payments.

Business owners who are exploring using cryptocurrencies to pay independent contractors and carry out business-to-business payments aren’t immune to information reporting requirements just because they’re using virtual currencies.  So if a company pays rent, salaries, annuities or other compensation using cryptocurrency transactions that are valued at $600 or more—and the recipient is not considered a tax-free entity—the company is required to report the fair market value of each transaction at the time of payment both to the IRS and to the recipient.  If you’re also making payments to independent contractors for services rendered, you would also need to be reported payments valued at over $600 on the contractor’s Form 1099-MISC.  Failure to do could result in hefty fines for your business.

If you searching for CPA firms to assist you with reporting cryptocurrency income and capital gains, contact Camuso CPA. Whether you need tax preparation services, assistance with properly reporting gains and income from virtual currencies on your taxes, cryptocurrency portfolio analysis, or any other service provided by a certified accountant, Camuso CPA can help.

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Why Cryptocurrency Investors Cannot Use Popular Tax Preparation Software

Here at Camuso CPA, we offer a wide array of tax and accounting services for cryptocurrency investors and traders including tax preparation, tax planning and portfolio reconciliations.

Virtual currency exchanges signed up millions of new users in 2018. However, cryptocurrency became an increasingly mainstream investment last year, and more and more people started trading at high volumes. By the end of the year, some of the more active cryptocurrency investors had made thousands of trades.

The IRS requires investors to submit records showing every time they sold or spent their virtual currency assets. For high volume traders, this can add up quickly.

As the cryptocurrency investment community gets ready for tax season, some high-volume investors are finding they are no longer able to self-prepare. This is because many of the existing tax preparation software limits the number of transactions you can report. TurboTax Online can only accept up to 500 transactions per account, and the company warns that online performance is likely to go down as more information is uploaded.

Camuso CPA offers the highest-quality tax advice and planning services specifically focused on the needs of cryptocurrency investors.  The tax laws are changing, and the IRS is focusing on the crypto investors. Cryptocurrency investors need sound tax advice from a trusted and experienced CPA.

If you searching for CPA firms to assist you with reporting cryptocurrency income and capital gains, contact Camuso CPA. Whether you need tax preparation services, assistance with properly reporting gains and income from virtual currencies on your taxes, cryptocurrency portfolio analysis, or any other service provided by a certified accountant, Camuso CPA can help.

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United Kingdom Issues Cryptocurrency Tax Guidance

Here at Camuso CPA, we offer a wide array of tax services for cryptocurrency investors including tax preparation and tax planning. Financial service  companies are transitioning from employee driven revenue models to information driven revenue models. Camuso CPA strives to deliver useful insights and offer relevant explanations about the latest tax and financial topics.

The United Kingdom’s tax agency has released an explanation of how it sees cryptocurrency assets and how individuals will be taxed on their holdings. The report focuses on how individuals possessing cryptocurrency might be taxed,but does not outline the tax structure for tokens held by businesses or for business purposes. Guidance on that will be published at a later date. Her Majesty’s Revenue and Customs (HMRC) is the government agency responsible for collecting taxes.

This does not impact US investors, but we watch all crypto tax regulation developments closely to gain insights to perspectives and circumstances that can impact future legislation here in the USA. Much like the US the UK tends to view crypto tax property for tax purposes.

The report notes a token’s treatment for tax purposes is dependent on the token’s use case, rather than its definition. Cryptocurrencies will not be taxed in the same way as gambling. The report goes into detail, explaining how and when their transactions may be classified as securities. To simplify the calculations required, taxpayers are permitted to pool different assets together.

Investors who purchase tokens specifically in the hopes that their value will increase will be required to pay capital gains tax when they sell, while individuals who receive tokens from their employers as a form of payment, from mining, transaction fees or airdrops will have to pay income tax and national insurance contributions.

Tax authorities across the world will continue to issue further guidance and focus more heavily on cryptocurrency tax compliance. We will continue to track these developments closely.  Time will tell, but it will be interesting to see how things develop here in the states related to the designation of cryptocurrency as intangible property from the Private Letter Ruling in 2014.

If you searching for CPA firms to assist you with reporting cryptocurrency income and capital gains, contact Camuso CPA. Whether you need tax preparation services, assistance with properly reporting gains and income from virtual currencies on your taxes, cryptocurrency portfolio analysis, or any other service provided by a certified accountant, Camuso CPA can help.

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Israel’s Tax Body Pursuing Cryptocurrency Investors

Here at Camuso CPA, we offer a wide array of tax services for investors including tax preparation and tax planning. Financial service companies are transitioning from employee driven revenue models to information driven revenue models. Camuso CPA strives to deliver useful insights and offer relevant explanations about the latest tax and financial topics.

Much like the USA, Israel taxes cryptocurrency as property which exposes it to capital gains liabilities. The tax-collection agency of Israel is actively targeting cryptocurrency traders and investors in in order to reduce tax evasion.

Some of the measures taken include sending notice letters to individuals suspected of not reporting their earnings from cryptocurrency trading. It was cited that some of the tell-tale signs of tax evasion by cryptocurrency traders include frequent travels abroad without documentation or material evidence of how the trip’s expenses will be met. Additionally, those who own multiple real estate properties are also being targeted.

The Australian Tax Office has also recently warned Australians to declare their annual returns from virtual currencies. The main intention is to tighten regulations and improve the tax collection from virtual currency-related activities. This is something similar to what other regulatory agencies are doing around the world.

Earlier this year, America, the U.K., Canada, Australia, and the Netherlands formed an International Task Force called the Joint Chiefs of Global Tax Enforcement with the goal of sharing intelligence to track down tax evaders.

The task force, also referred to as “J5”, comprises the Australian Criminal Intelligence Commission (ACIC) and Australian Taxation Office (ATO), the Canada Revenue Agency (CRA), the Fiscale Inlichtingen- en Opsporingsdienst (FIOD), HM Revenue & Customs (HMRC), and Internal Revenue Service Criminal Investigation (IRS-CI).

If you searching for CPA firms to assist you with reporting cryptocurrency income and capital gains, contact Camuso CPA. Whether you need tax preparation services, assistance with properly reporting gains and income from virtual currencies on your taxes, cryptocurrency portfolio analysis, or any other service provided by a certified accountant, Camuso CPA can help.

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CFA 2019 Exam Includes Crypto And Blockchain Topics

According to Bloomberg, the Chartered Financial Analyst (CFA) examination has added cryptocurrency and blockchain to its curriculum. Candidates for this exam are generally expected to clock 300 hours of study time.

The exam, run by the CFA institute, has reportedly prepared over 150,000 financial sector professionals through its intensive 3-tiered program, which is now set to include crypto and blockchain as part of its Level I and II curricula.

Crypto and blockchain have now been added as part of a new section called ‘Fintech in Investment Management,’ for which the materials will be released this August in preparation for CFA’s 2019 exams.

The fact that the new CFA exams in 2019 will include cryptocurrencies and blockchain, is a sign that the digital assets have arrived in Wallstreet. While digital coins have decreased in value in 2018 and the real-world impact of blockchain ventures could ultimately transform the global financial system.

If you are searching for CPA firms to assist you with reporting cryptocurrency income and capital gains, contact Camuso CPA. Whether you need tax preparation services, assistance with properly reporting gains and income from virtual currencies on your taxes, cryptocurrency portfolio analysis, or any other service provided by a certified accountant, Camuso CPA can help.

Patrick Camuso, CPA is founder and owner of Camuso CPA, a Charlotte, NC based CPA firm consulting to cryptocurrency investors, miners and business nationwide.

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Countries Cooperate To Form International Crypto Tax Force

This article does not contain tax advice, investment advice or recommendations. Every investment and trading move involves risk, you should conduct your own research when making a decision

America, the U.K., Canada, Australia, and the Netherlands are cooperating to form an International Task Force called the Joint Chiefs of Global Tax Enforcement with the goal of sharing intelligence to track down tax evaders.

The task force, also referred to as “J5”, comprises the Australian Criminal Intelligence Commission (ACIC) and Australian Taxation Office (ATO), the Canada Revenue Agency (CRA), the Fiscale Inlichtingen- en Opsporingsdienst (FIOD), HM Revenue & Customs (HMRC), and Internal Revenue Service Criminal Investigation (IRS-CI).

Their specific targets include offshore accounts and cryptocurrencies. The IRS is set to issues a press release later this year with further details on the new task force. In their initial overview found here, the IRS outlines what the task force is originally designed to do:

1. Develop shared strategies to gather information and intelligence that will strengthen operational cooperation in matters of mutual interest, and target those who seek to commit transnational tax crime, cybercrime and launder the proceeds of crime

2. Drive strategies and procedures to conduct joint investigations and disrupt the activity of those who commit transnational tax crime, cybercrime, and also those who enable and assist money laundering

3. Collaborate on effective communications that reinforce that J5 is working together to tackle transnational tax crime, cybercrime and money laundering

 

 

If you are searching for CPA firms to assist you with reporting cryptocurrency income and capital gains, contact Camuso CPA. Whether you need tax preparation services, assistance with properly reporting gains and income from virtual currencies on your taxes, cryptocurrency portfolio analysis, or any other service provided by a certified accountant, Camuso CPA can help.

Patrick Camuso, CPA is founder and owner of Camuso CPA, a Charlotte, NC based CPA firm consulting to cryptocurrency investors, miners and business nationwide.

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AICPA Requests Further Guidance From IRS on Cryptocurrency

The American Institute of Certified Public Accountants which is the world’s largest association of accounting professionals asked the IRS to issue immediate, updated guidance regarding the tax treatment of cryptocurrency transactions.  The first IRS tax guidance for cryptocurrencies was introduced March 2014, few CPAs have done comprehensive analyses of the record-keeping and enforcement challenges that will arise from the IRS designation of Bitcoin as property rather than currency.

The AICPA’s submission to the IRS includes suggested Frequently Asked Questions that address the following areas:

  1. Expenses of obtaining virtual currency
  2. Acceptable valuation and documentation
  3. Computation of gains and losses
  4. Need for a de minimis election
  5. Valuation for charitable contribution purposes
  6. Virtual currency events
  7. Virtual currency held and used by a dealer
  8. Traders and dealers of virtual currency
  9. Treatment under Sec. 1031
  10. Treatment under Sec. 453
  11. Holding virtual currency in a retirement account
  12. Foreign reporting requirements for virtual currency

The lack of guidance around the taxation of cryptocurrencies pose uncertainties to the taxation of cryptocurrency and blockchain technology transactions. Additional guidance is largely overdue. Our team along with industry participants are awaiting answers and clarification from the IRS.

Are you looking for a CPA in for cryptocurrency tax help? Give Camuso CPA a call today. We also offer a host of other tax services for your benefit. For more information on how our services can help you, please do not hesitate to give us a call at your earliest convenience. One of our friendly and knowledgeable representatives will be happy to answer any questions that you may have.

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What is my cost basis for my Cryptocurrencies Investments?

Reporting and enforcement regarding the taxation for cryptocurrencies presents many challenges for the IRS and taxpayers. The IRS requires that taxpayers report the fair-market value of their coins on the date that the currency is received. Taxpayers must determine fair-market value in a “reasonable manner which is consistently applied”.

Generally, the fair-market value reported by a taxpayer disposing of cryptocurrencies should serve as the additional cost basis for the new taxpayer acquiring the currency. This is a classic example of “easier said than done” since there is no way to ensure consistent reporting, and many taxpayers may report conflicting cost basis that maximize personal tax advantages. Often it may not be possible to accurately determine a fair cost basis especially for newly created currencies.

In early IRS rulings, the agency provided guidance separating traded “convertible” virtual currencies such as Bitcoin from other virtual currencies, noting that only convertible virtual currencies that have an “equivalent value in real currency, or that acts as a substitute for real currency” will be considered taxable.

There are generally two tests to determine a virtual currency’s convertibility. First taxpayer’s should determine whether a currency is “listed on an exchange and the exchange rate is established by market supply and demand,” which would make it convertible to another “real currency” like the U.S. dollar.

This presents a gray area for virtual currencies that are thinly traded on exchanges and only trade with respect to other convertible virtual currencies. Be aware the IRS has made it clear it plans to tax gains on successful convertible virtual currencies retroactively.

The second test is to determine whether taxpayers can buy anything tangible with the currency, or if its value is instead driven by speculation. The IRS outlined, “The sale or exchange of convertible virtual currency, or the use of convertible virtual currency to pay for goods or services in a real-world economy transaction, has tax consequences that may result in a tax liability.” If a currency isn’t valuable in commerce there is a true question as to whether this will be treated by the IRS as convertible.

Traders are permitted to calculate their cost bases using different methodologies. Since currencies are considered private property from a tax perspective, investors have the option to sell their assets on a first-in-first-out (FIFO) basis, a last-in-first-out (LIFO) basis, or to sell those specific tax lots that are most efficient under the “specific share identification” method used for stocks. The choice of cost basis directly impacts long-term and short-term capital gains tax liabilities.

Trading platforms may automatically incorporate FIFO or LIFO tracking methods but neither of these options may present the most tax efficient method for a taxpayer. Generally specific share identification offers the greatest tax planning opportunities and benefits.

This is most likely the tax advantaged approach to tracking a taxpayers cost basis but it currently costly to do and often times not possible. Even the top exchanges and hosted wallets currently lack the accounting software needed to ensure trades are executed in on a share by share basis. Individuals must track their own sales which creates a high level of complexity and time commitment.

Camuso is one of the pioneering CPA firms offering tax services for cryptocurrencies, including Bitcoin and Etherium . Our services can help you get ahead of the game, and save you money where other firms may not have the knowledge or capital to do so.

Camuso CPA PLLC offers comprehensive services to develop and tailor a first-rate tax plan for your business needs.  Reach out to our team regarding any questions about Cryptocurrencies or establishing a comprehensive tax plan, and one of our Charlotte CPAs will assist you.

Contact Us Today: https://www.camusocpa.com/contact/#/

 

 

 

 

 

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