Many cryptocurrency enthusiasts have made a financial killing in the last few years trading Bitcoin, Ethereum and other alt-coins. While the IRS issued some cryptocurrency guidance back in 2014, making it clear that virtual currency is treated as a capital asset, it’s been shown that many people haven’t been proactive in reporting gains on their yearly tax return. This is a mistake and, as any quick Google search will show you, the IRS is taking note. This is where you as the CPA can come in and offer something that is invaluable to your customer, while positioning yourself as being on the cutting edge of what is going on with the latest in tax code.
This folly of your clients can represent a huge opportunity for your business. Most CPAs (and, let’s face it, most people) aren’t well-versed in crypto tax law. How could you be when the IRS still hasn’t gotten a complete handle on everything in the space? Still, there aren’t very many firms offering these services—Maybe they see it as frivolous, time consuming and scary. Maybe they just aren’t interested and think crypto is a “fad”. Whatever the reasons, being in denial doesn’t mean virtual currency is going away. As more people interact with cryptocurrency and participate in ICOs, more will be struggling to figure out how to accurately calculate and deal with their gains.
While positioning yourself as friendly to the space can give you a tremendous edge that your competition doesn’t have, crypto tax services are also a low impact way to generate a lot of profit. When you use a software like BitTaxer, which calculates your client’s tax burden in a matter of minutes, you save a ton of time while charging for your services. It’s very little effort on your end and will leave your client feeling safe in your capable hands.
How does it work? You simply upload/import the transactions from your client’s virtual currency exchange of choice, answer a few questions, and then are given a fancy completed report to use for filing, or a file which can be directly imported into your chosen tax software.
Showing you are a cryptocurrency-friendly CPA in anticipation of greater adoption will put you ahead of the curve in your business. By adding this service now you will bolster your knowledge base when others are just beginning to learn, leaving you to look like the pro you are in comparison.