Our Experts Reveal: Don’t Wait Until the Last Minute to File Your Crypto Taxes in 2024

Procrastination can be costly, especially when it comes to filing your crypto taxes. The IRS deadline is set, and waiting until the last minute might not be the wisest move. 

Here's why it's critical to file your crypto taxes on time, along with tips to make the process smoother.

It can be tempting to procrastinate, but when it comes to crypto taxes, waiting can lead to unnecessary stress. The IRS has a firm general and crypto tax reporting deadline, and missing it can result in penalties. Filing on time ensures you avoid these penalties and have ample time to address any unexpected issues that may arise.

While there might be situations where waiting makes sense, such as waiting for all necessary documents, the risks often outweigh the benefits of early filing. The complex nature of crypto transactions, including sales, trades, and income from various sources, demands meticulous reporting. Waiting until the last minute increases the likelihood of errors that could lead to penalties.

Filing early offers several advantages. Firstly, you can get your tax refund sooner if you're eligible. Additionally, early filing provides a buffer, giving you time to prepare for any tax bills that may arise. With tax reform changes, understanding your financial obligations early on is crucial for effective financial planning. When should you file early? Whenever possible.

The time it takes to file crypto taxes depends on various factors, including the volume of transactions, the complexity of your activity in crypto, the number of exchanges and wallets you’ve used, and whether you enlist the help of a crypto tax professional or use crypto tax software like TokenTax. 

Waiting until the last minute can lead to a rushed process, potentially resulting in errors. Filing on time ensures you have sufficient time for accurate calculations and proper documentation.

Filing your crypto taxes promptly is crucial, and adopting efficient strategies can make the process smoother. Here are some valuable pieces of advice to expedite your crypto tax journey this and every tax season.

Gather your documents

Begin the tax-filing process by meticulously collecting all relevant documents. This includes transaction records, receipts, and any documentation related to your crypto income.

Ensuring that these documents are well-organized and readily available will significantly expedite the overall filing process. A systematic approach to document collection not only saves time but also minimizes the chances of overlooking crucial details.

Consider using tax preparation software

Embracing technology can be a game-changer when it comes to crypto tax reporting. Consider employing advanced tax preparation software, such as our crypto tax calculators at TokenTax. We also integrate with TurboTax to make your crypto tax filing easy. 

Tools like these help to automate the intricate process of calculating your crypto taxes. By connecting with your wallets, exchanges, and blockchains, these platforms can efficiently analyze vast amounts of transaction data, providing accurate and comprehensive reports. This not only saves time and effort but also ensures precision in your tax calculations.

Get professional tax help if you need it

In the intricate landscape of crypto transactions, seeking professional assistance is a prudent move, especially for those with complex financial activities. If you find yourself grappling with intricate transactions or uncertainties about specific aspects of crypto taxes, consider enlisting the expertise of professional tax advisors. 

These specialists, well-versed in the nuances of crypto taxation, can offer tailored guidance, ensuring your filings are not only accurate but also compliant with the ever-evolving tax regulations. While there might be a cost associated with professional services, the peace of mind and potential savings often outweigh the investment. Ultimately, expert advice can navigate you through the complexities, reducing the risk of errors and optimizing your tax outcomes.

Here are answers to frequently asked questions about how to file crypto tax on time, last-minute crypto taxes, what happens if you don’t file crypto taxes, and the crypto tax deadline in the US.

When is the best time to file your crypto taxes?

The best time to file your crypto taxes is as soon as you have all the necessary documents and information. Waiting until the last minute introduces unnecessary risks and stress, and may result in penalties or fees. Your crypto tax reporting should be filed with your annual tax return, and there is no special “crypto tax deadline” in the US.

What if I forgot to file my crypto taxes?

If you forget to file, take immediate action. Delays can lead to penalties and complications. File as soon as possible, even if it's after the deadline, and if necessary work with a crypto tax professional who can help to ensure you’re compliant. Filing late is better than not filing at all.

Can I file crypto taxes late?

While you can file late with a tax extension, it's not advisable. Payment is still required by the April deadline, and late filings may incur penalties. It's best to adhere to the set deadlines. Filing your crypto taxes on time is a proactive and prudent approach. 

With the assistance of services like ours at TokenTax, the process becomes more manageable, ensuring accurate and timely submissions. Don't let procrastination cost you. File your crypto taxes on time to stay in compliance with the IRS.