In this article, we go over the question on how do I pay bitcoin tax using BitcoinTaxes. We try to answer the question by investigating the BitcoinTaxes platform in several terms. Firstly, we go over what counties implement taxes on BTC trade and why are such policies important. Then, we go over the BitcoinTaxes platform in terms of ownership, privacy, fees & prices and services.
Lastly, we conclude with reasons on why you should pay taxes for your trading profits from bitcoins. We also provide a general opinion about BitcoinTaxes ability to match your financial needs.
Taxes on Bitcoins
Before we indulge in the analysis of BitcoinTaxes, firstly we need to determine what countries require traders to pay them up. The current list consists only of officially reported regions and the number of them may change drastically at any time. Countries implementing the taxes on cryptos are:
- USA, EU, the UK, Japan, Australia, Canada, Israel, Turkey, and Brazil
Many other countries are either thinking about involving cryptos into its financial regulations or are designing it as we speak.
In most cases, purchasing and selling coins do not carry VAT (Value-Added Taxes) requirements. What trade does come under are capital gains or income tax, depending if profit is involved. Since cryptocurrencies are yet to be recognized as legal tender like fiat money, governments see the coins as online assets. Thus, once you sell BT for fiat money, you are eligible for tax regulations.
In 2013, the capital gains online calculator, BitcoinTaxes, was established by Colin Mackie, CEO, and Founder of Denebrook Software LLC. The aim of the platform was to provide access to all traders from around the globe to crypto tax calculations. Services offered by the BitoinTaxes are available globally but the real value of the platform lies mostly in developed regions.
The reason is simple – countries like US, Canada, UK, and Australia have already found digital coins to be liable for taxes. Moreover, since different regions have different policies regarding financial obligations, BitcoinTaxes offers many consultants from various countries. In a picture below, you will find that the consultant team has origins from several parts of the world.
Since every country has its own financial reporting standards, either GAAP or IFRS, consultants familiar with these systems are needed.
What does BitcoinTaxes offer?
Now, let us delve into the BitcoinTaxes platform in terms of services offered, program plans, and payment methods available.
There are several services offered by BitcoinTaxes at this point. The first is the import of your transactions. The platform offers a form as shown below for a variety of exchanges. In this section, you put your buy and sell transfers, fees that have occurred in the meantime and currency used when transactions took place.
Different exchanges also have their own form, meaning that you should put information on your transactions separately. Once you have recorded all your crypto activities, the program would then calculate for you:
- Long & Short Term Income Tax;
- VAT if applicable;
- Capital Gains Tax.
You also have the ability to choose crypto inventory value calculation under FIFO, Average or LIFO systems. Apart from bitcoin, any other cryptocurrency can be used for tax calculation. Each country has its own tax implications. Thus, the tax calculation would be different for each region in terms of rate, inventory model, and Capital Gains recognition.
Currently, there are two programs available for clients. These two are “Individual” and “Trader” plans, with “Individual” being a more simplified version of “Trader”. You can check out more details about these programs in the picture below.
In terms of applicability, the services and programs available at BitcoinTaxes are extensive. Since each region has its own tax regulations, it is important that products match the needs of traders. Calculations are highly customizable which is a plus. Price of plans is competitive, especially if the revenue of your trades can reach over $10.000 on yearly basis.
Accepted Payment Methods
At this moment, you can purchase these plans using bitcoin, altcoins or credit card. All payments come with no fees, apart from network costs for BTC and altcoins and credit card manufacturer’s expenses.
What about Security
Since you are not keeping any assets, fiat or crypto, in the platform, the security tools are not that important. Nevertheless, you still have password manager and two-factor authentication (2FA) protecting your personal details, as shown below.
While purchasing plans, you are required to provide your first & last name with address and zip code. That is about it when it comes to your personal information, meaning that platform is highly anonymous. You do not need to put your business name if you are an organization nor do you have to upload any sort of identity document.
As mentioned before, anyone can enter the platform and use its services. However, countries that would have the most value are the ones that have tax regulations for cryptocurrencies. These countries in the platform are USA, Canada, Australia and Europe. Other regions can also apply for programs but these are supported in terms of calculator products and consultancy.
Why Should You Pay Taxes
If you happen to live in a country that implements tax policies on crypto trade, there are several reasons why you should adhere to them. Firstly, you play in a regulated market, where the safety of your coins can be guaranteed. With paid taxes, you can apply for insurance programs for your coins.
So, if a hacker steals them form you, the insurance company would supply funds back to you. Government agencies, on the other hand, would also have ground to prosecute these hackers. Without protection, you may make slightly larger profit margins. However, risks are great in the market and additional safety features are always more than welcome.
In this guide, we have investigated how do I pay bitcoin tax using BitcoinTaxes. Taking everything into account, the platform proved to be an adequate service provider. It value privacy and plans are competitively priced. Moreover, since each region has different crypto tax policies, tools, and calculators are highly customizable.
Lastly, you have a number of tax consultants that you can contact and work with, dedicated to different countries.