How to find a decent US crypto tax accountant
Finding a crypto tax accountant is not easy. There are thousands of CPAs and tax filing professionals in the United States, but very few understand this novel industry enough to guide you correctly. If you also consider that the IRS has not released clear guidelines around cryptocurrency tax rules, it can be quite difficult to find an accountant you can trust.
Here are some things to consider when choosing a tax accountant:
Does this accountant understand crypto and blockchain?
If you have a CPA that does not understand the industry, the tools, and the projects, you may be out of luck. Have they invested or used crypto themselves? Crypto is so unique that you do not want to lean on someone who cannot relate to the asset class’s nuances.
Investing in crypto is not like investing in a traditional asset like stocks or real estate. If your CPA understands how reporting those assets works, it does not mean he or she will understand how reporting crypto works. Crypto is way more complex due to a few reasons.
Can this accountant work with crypto data?
The data in the crypto spaces is very complex and lacks uniformity. Every exchange works very differently and does not have the same reporting requirements. Additionally, many exchanges fail to create tax forms for their users as a traditional brokerage platform such as Fidelity or Scottrade would.
When a crypto exchange, such as Coinbase, does produce a tax form, the tax form is likely wrong. This is because they will assume any transfers out of their platform as a sale, when it could be a transfer. That brings us to another nuance unique to crypto: the transfer and control of assets.
Does this tax accountant understand crypto custody?
In traditional asset classes, such as stocks and bonds, there is no way for you to hold your own stocks and bonds outside of a brokerage, whereas in crypto there is. In crypto you can move your holdings to your own wallet, or you can move it to another exchange. If your accountant does not understand this, he or she can miss cost basis and file your taxes wrong.
Does your crypto accountant understand crypto edge cases?
Purchasing crypto by selling fiat is one of many ways that you can obtain crypto. Does your accountant understand how mining works? What about block rewards, airdrops, or trading on margin? Very few CPAs understand these novelties.
Does your CPA understand how to treat crypto that has been hacked or stolen due to an exchange hack or a lost Trezor wallet? Do they understand that crypto to crypto trades are taxable? Will he or she be able to convert that BTC/XRP trade or XLM/BNB trade back into fiat correctly? Will your tax accountant understand how to apply multiple accounting methods to help minimize your tax liability?
The tax season is peak revenue time for more tax preparers, meaning that they make most of their money over the coming weeks. Given that they are in a volume business, they need to service as many clients as they can in order to maximize revenue.
Most tax clients only have a W2 and maybe one simple investment, which makes their tax filing easy. Accountants that do not specialize in crypto taxes are not incentivized to learn how crypto works in order to get your taxes right. They are incentivized to cut corners and file your return as quickly as they can.
Luckily, the team at TokenTax consists of crypto accountants and engineers. We have a full team that can file your crypto returns, and we are backed by top crypto tax software that can address all the edge cases mentioned above. Our entire team has been in the crypto and blockchain space for years and understands the ins and outs. Click here to see our tax filing packages, or just chat with us right now using the chat function on our page.
If you choose your own accountant, make sure they understand all the questions above.
TokenTax does the work so you don’t have to.
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