This article is part of TokenTax's Cryptocurrency Tax Guide.
As demand for cryptocurrencies has increased, so has the demand for cryptocurrency accountants and CPAs who specialize in this field. These crypto tax experts can keep you informed and show you how to take advantage of gains and losses before and after tax season.
Is hiring an accountant for cryptocurrency worth it?
The status of cryptocurrencies is still murky. However the IRS has begun to clamp down and distribute detailed guidelines for how digital currencies is taxed — specifically how gains/losses, cost basis, and tax deductions from losses are to be recorded now and in the future.
Working with a crypto CPA is a great way to prepare your data for tax season and beyond
Alongside their capital gains, many crypto traders will need help accounting for crypto mining and staking as well. Or, they may need help understanding the difference between taxable events that will affect their tax liability and non taxable events that need to be recorded for their crypto tax calculations.
While the cryptocurrency community scrambles to understand what the tax law expects of them, normal accounting firms will be familiar with the basics of cryptocurrency tax preparation, like filing a Form 8949. However these accountants may not have a grasp of the nuances of tax reporting that crypto tax accounting demands.
Some questions to ask before hiring an accountant
To ensure the accountant you hire is capable in the cryptocurrency space, evaluate their answers to some or all of the questions below. A qualified CPA should be comfortable discussing these topics.
How familiar are you with cryptocurrency?
What does your process look like and how long will it take?
Can you calculate my data from multiple exchanges?
Do you know the definition for staking and mining and how they affect my taxes differently?
Have you filed an FBAR before?
Do I need to give you my data for past years?
I don’t have all of my trade data. What can I do still file accurately and on time?
To stay up to date on the latest, follow TokenTax on Twitter @tokentax.