Blockworks, a cryptocurrency news outlet, has released “The Investor’s Guide to Crypto Taxes” sponsored by Ledgible, a crypto tax and accounting platform for professionals. Ledgible has partnered with big names like Thomson Reuters, SurePrep, and Intuit to create tax and accounting software for professionals to use in managing cryptocurrency accounting.
The company boasts the seal of the AICPA SOC 1, and SOC 2 audits, and its website states, “accounting firms use our platform globally for crypto tax, crypto accounting, and crypto audit for billions of dollars of crypto assets.” (www.ledgible.io).
The software allows you as a professional to easily connect all your clients with cryptocurrency wallets in one software. The system then allows you to connect client crypto wallets to their account in the software for you to be able to view all their transactions easily.
This allows professionals significantly more insight into the crypto transactions of their clients annually. Allowing us to advise our clients better and ensure compliance filing. Given that many taxpayers do not understand the current tax regulations surrounding crypto, it is difficult for professionals to be able to discern if all required transactions are reported accurately.
The Blockworks guide is free and breaks down frequently asked questions about the tracking of crypto transactions and how they are taxed. This guide is a fantastic tool to consider providing to clients that have crypto investments or providing to your team to start learning the basics of how to handle these transactions when they see them on a client’s return.
The biggest challenge in dealing with cryptocurrency is that often the taxpayers don’t know what they don’t know. The nuances of the tax laws present a challenge when we are held to the standard of advisors, and the clients expect us to advise them. Still, we also do not have significant visibility of their crypto transactions.
Many “wallets” don’t provide clean reports like you would expect to see from a typical broker who sends 1099s at the end of each year. Educating our clients and our team about what they should be watching for is a good first step to helping ensure compliant returns.
If your practice is starting to deal with a significant number of clients who are invested in cryptocurrency, Ledgible may be a tool worth investing in to help support compliance and efficiency for your team this upcoming tax season.