Home / Crypto Currency / Americans Are Ducking Their Bitcoin Tax Bill, Research Shows

Americans Are Ducking Their Bitcoin Tax Bill, Research Shows


Australia bitcoin tax

Advertisement

Join our community of 10 000 traders on Hacked.com for just $39 per month.

While US tax selling is said to have fueled much of the pressure in the bitcoin price till the most recent turnaround, Uncle Sam may find he has come up short when tax day rolls around on April 17. That’s because only a fraction of filers are actually reporting their crypto-fueled profits from 2017, when the cryptocurrency market ballooned in value by $590 billion. According to research done by Credit Karma Tax and obtained by CCN, “reporting of bitcoin gains still at negligible levels as deadline approaches.”

Credit Karma Tax analyzed the most recent one-quarter of a million filers on the company’s platform and discovered only “a tiny fraction” of the group had reported bitcoin gains. In fact, results were little changed from a similar study they did in February, with findings from the studies revealing fewer than 200 of a combined 500,000 filers reported bitcoin gains. Nonetheless, the most recent group’s results reflect “more than a 100% increase” versus the February findings.

The data is alarming because Americans are expected to owe $25 billion in cryptocurrency-fueled capital gains for the 2017 tax year, according to Fundstrat’s Thomas Lee, who presciently called the end of the US tax season as the catalyst for the market turnaround. If Credit Karma’s findings are any indication, many people could find themselves in trouble with the IRS. Meanwhile, Fundstrat predicts that nearly one-third of cryptocurrency market participants are US-based.

Form 8949

The US government decided that for federal income taxes, bitcoin and altcoins should be taxed as property, requiring filers to report their profits or losses from last year’s run-up in the cryptocurrency market as a capital gain or loss. US residents who generated gains from their cryptocurrency holdings last year should file Form 8949, which is the document Credit Karma Tax is tracking to analyze results.

Jagjit Chawla, general manager of Credit Karma Tax, gave filers the benefit of the doubt, telling CNBC: “There’s a good chance that the perceived complexities of reporting cryptocurrency gains are pushing filers to wait until the very last minute.” Despite the risks crypto traders are willing to take in their investment portfolios, they may want to be a bit more circumspect in their dealings with the IRS.

Cryptocurrency investors are already on the radar of the IRS, as evidenced by US bitcoin exchange Coinbase’s recent disclosure that it turned over thousands of records to the tax agency, as CCN previously reported. In that case, the tax agency was probing the accounts of people who traded more than $20,000 in the 2013-2015 tax years.

Featured image from Shutterstock.
Follow us on Telegram.
Advertisement
Read more

Check Also

Bitcoin Price Watch: BTC Hesitates, But Recovery Seems Likely

Key Points Bitcoin price found support near the $3,125 level and later recovered against the US Dollar. There is a major bearish trend line formed with resistance at $3,220 on the hourly chart of the BTC/USD pair (data feed from Kraken). The price is likely to correct towards $3,320 if there is an upside break above the $3,220 resistance. Bitcoin price is showing positive signs above $3,120 against the US Dollar. BTC could rebound in the short term towards the $3,320 or $3,400 levels. Bitcoin Price Analysis This past week, there was fresh decline below $3,300 in bitcoin price against the US Dollar. The BTC/USD pair even broke the $3,250 and $3,200 support levels. A new low was formed at $3,121 and later the price formed a decent support above $3,120. As a result, the price started a short term correction and traded above the $3,180 and $3,200 resistance levels. There was also a break above the 23.6% Fib retracement level of the last drop from the $3,487 high to $3,121 low. However, the upward move was protected by the $3,260 level and the 100 hourly simple moving average. There is also a major bearish trend line formed with resistance at $3,220 on the hourly chart of the BTC/USD pair. The current price action indicates that the price could break the trendline, $3,200, and the 100 hourly SMA. A successful close above $3,220 may push the price towards $3,300 and $3,320. The 50% Fib retracement level of the last drop from the $3,487 high to $3,121 low is also at $3,304. Looking at the chart, bitcoin price seems to be setting up for a bullish break above $3,220. If BTC buyers fail to gain momentum above $3,220, there could be a fresh slide towards $3,120 or $3,080. Looking at the technical indicators: Hourly MACD – The MACD for BTC/USD is about to move into the bullish zone. Hourly RSI (Relative Strength Index) – The RSI moved above the 50 level. Major Support Level – $3,120 Major Resistance Level – $3,325 The post Bitcoin Price Watch: BTC Hesitates, But Recovery Seems Likely appeared first on NewsBTC.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Disclaimer: Trading in bitcoins or other digital currencies carries a high level of risk and can result in the total loss of the invested capital. theonlinetech.org does not provide investment advice, but only reflects its own opinion. Please ensure that if you trade or invest in bitcoins or other digital currencies (for example, investing in cloud mining services) you fully understand the risks involved! Please also note that some external links are affiliate links.