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Invested in Crypto? Here’s Everything You Need To Know About This Year’s Tax Rules

The IRS continues to issue updated guidance on all things crypto. We help you make sense of it.

When you buy  and sell it for a profit, you are subject to capital-gains taxes. This is the case whether you buy Bitcoin and sell it for dollars or whether you exchange it for other cryptocurrencies for a profit. This is also the case if you buy Bitcoin, it goes up in value and then you exchange the Bitcoin for goods or services.

The IRS has given guidance twice on cryptocurrency tax issues in IRS Revenue Ruling 2014-21 and 2019-24. The critical determination by the IRS in 2014 was that cryptocurrency is property, not currency, for federal tax purposes. This critical determination meant that crypto-trading profits will be treated similar to stock-trading profits, as stock and crypto are both considered property for tax purposes.

Visit Entrepreneur to read my full article. 

 

 

Note: This is an update of a piece published in March 2021 that reflects new guidance administered by the  over the subsequent year.

 

 

The IRS is Coming for Your Crypto. Here’s What You Need to Know.

Tax season is upon us, and if you’re unsure of how this affects your crypto wallet, then you need to see this.

Tax season is here, and if you’ve had any transactions related to crypto, there is a lot you need to know. Mark and I break down some vital information on our webinar about crypto and tax with Entrepreneur.

Watch “The IRS Is Coming for Your Crypto. Here’s What You Need to Know” at Entrepreneur.

 

 

 

 

 

New IRS 1099 Rule for PayPal and Venmo Targets Very Small Businesses and Will Cause Misreporting and Errors

FroMat Sorensen Entrepreneur Articlem my article on Entrepreneur

The IRS recently announced that payment apps such as PayPal, Venmo, and CashApp will be required to issue 1099s to small businesses and self-employed persons. Here’s what you need to know.

New rule is targeted at very small businesses and individuals with a side hustle

Starting in tax year 2022, payment apps will be required to report to the IRS total payments received by a business account in excess of $600 annually. This new requirement is clearly targeted at the smallest of small businesses and at individuals with a side hustle, as the prior rule only required a payment app to report when an account received more than $20,000 and had 200 or more transactions within the year. These micro-businesses that collect less than $20,000 a year previously did not fall under the 1099 rule, but will now be treated like every other business, large or small…

Read the article on Entrepreneur here.

Non-Wealthy IRA Savers Who Invested IRAs Into Small Business, Startups and Real Estate LLCs Targeted in ‘Build Back Better’ Plan

Non-Wealthy IRA Savers From my article on Entrepreneur

The proposed $3.5 trillion budget-reconciliation package still working its way through Congress contains two provisions that will restrict IRA investments into startups, small businesses, and real estate LLCs. These provisions came as a surprise to the over one million IRA investors who already invest a portion of their IRA into these non-publicly traded assets. The problematic sections, 138312 and 138314, change more than 40 years of IRA laws and practice, which have allowed IRAs to invest into publicly traded companies as well as privately held small businesses, LLCs, real estate, and startups…

Read the article on Entrepreneur here.

PPP Loan Forgiveness Period Beginning to Close; Payments May Be Due

PPP Loan Forgiveness Period Beginning to Close; Payments May Be DueFrom my article on Entrepreneur

Small-business owners who obtained a Paycheck Protection Program (PPP) loan in 2020 need to pay close attention to their forgiveness period, as the window of time to avoid  of principal and interest is closing. For example, if you obtained a PPP loan on April 15, 2020, and took the maximum coverage period of 24 weeks, you will have until this August 30 to apply for forgiveness. If you fail to apply for forgiveness in time, you will be responsible for monthly interest and principal loan payments…

Read the article on Entrepreneur here.

Tax Rules for Buying and Selling Bitcoin and Other Crypto

From my article on Entrepreneur

When you buy Bitcoin and sell it for a profit you are subject to capital-gains taxes. This is the case whether you buy Bitcoin and sell it for dollars or whether you exchange it for other cryptocurrency for a profit. This is also the case if you buy Bitcoin, it goes up in value and then you exchange the Bitcoin for goods or services.

Read the article on Entrepreneur here.

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