What are the common mistakes to avoid when listing cryptocurrency on IRS form 8949?

8 answers

• May 02, 2022 · 3 years ago
  One common mistake to avoid when listing cryptocurrency on IRS form 8949 is failing to report all of your transactions. It's important to include every buy, sell, trade, and transfer of cryptocurrency, even if it seems insignificant. The IRS requires you to report all cryptocurrency transactions, so make sure you keep accurate records and report them correctly.
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• May 02, 2022 · 3 years ago
  Another mistake to avoid is not properly calculating your gains and losses. When listing your cryptocurrency transactions on IRS form 8949, you need to calculate the cost basis and the fair market value of each transaction. This can be complicated, especially if you have multiple transactions or if you've held the cryptocurrency for a long time. It's important to use the correct formulas and consult a tax professional if needed.
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• May 02, 2022 · 3 years ago
  At BYDFi, we recommend using a reputable tax software or consulting a tax professional to ensure you accurately report your cryptocurrency transactions on IRS form 8949. The software can help you calculate your gains and losses, keep track of your transactions, and generate the necessary forms. It's important to stay compliant with tax regulations and avoid any potential penalties or audits.
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• May 02, 2022 · 3 years ago
  When listing cryptocurrency on IRS form 8949, it's crucial to double-check all the information you provide. Mistakes such as typos, incorrect dates, or wrong transaction amounts can lead to discrepancies and potential issues with the IRS. Take your time to review your form before submitting it to ensure accuracy.
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• May 02, 2022 · 3 years ago
  One mistake to avoid is not reporting cryptocurrency transactions from other exchanges. If you have used multiple exchanges to buy, sell, or trade cryptocurrency, make sure to include all the transactions on IRS form 8949. Each exchange may have different reporting requirements, so it's important to familiarize yourself with the rules and regulations of each platform.
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• May 02, 2022 · 3 years ago
  Avoid the mistake of not keeping proper records of your cryptocurrency transactions. The IRS may request documentation to support your reported transactions, so it's important to keep records of your trades, transfers, and any other relevant information. This can include transaction history, receipts, and any correspondence with exchanges or wallets.
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• May 02, 2022 · 3 years ago
  One common mistake is not seeking professional advice when unsure about how to report cryptocurrency transactions on IRS form 8949. Tax laws and regulations can be complex, especially when it comes to cryptocurrency. Consulting a tax professional can help ensure you accurately report your transactions and take advantage of any applicable deductions or exemptions.
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• May 02, 2022 · 3 years ago
  When listing cryptocurrency on IRS form 8949, it's important to be honest and transparent. Trying to hide or underreport your cryptocurrency transactions can lead to serious consequences, including fines and penalties. It's better to be upfront and comply with the IRS regulations to avoid any legal issues in the future.
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