Cryptocurrency exchange and custodian, Gemini is deploying TaxBit’s technology to tackle a surge in tax audits that have targeted individuals trading cryptocurrency. The move aims to resolve tax dilemma since it produces a variety of tax filing formats that the IRS often requires.
Gemini will use TaxBit’s Tax Center Suite to automate tax forms and filings, which helps reduce potential human errors and ensure automatic regulatory updates. The company’s Tax Information reporting solution allows Gemini to protect its users just as investors of other asset classes.
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“TaxBit’s software automates the calculations required for crypto tax reporting, helping reduce the pain point of crypto tax for our users. Investors will also be able to see real-time tax implications of any trades they make on Gemini, ” said Tyler Winklevoss, CEO of Gemini.
TaxBit provides customers with a tax liability dashboard, which gives them better visibility into the tax impact of their crypto transactions. Additionally, it helps file more accurate tax returns, monitors their tax liability and highlights potential tax refunds. Customers can see the real-time tax impact of their transactions, as well as receive trade alerts when tax saving opportunities are available.
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This collaboration with Taxbit, which is backed by Gemini founders, the Winklevoss twins, should address the reporting needs of the cryptocurrency customers in the upcoming tax season. As such, accounting professionals servicing crypto-transacting clients will have sources required when reconciling cryptocurrency balances and transactions.
Recently, there have been numerous reports emerging of tax authorities clamping down and going after cryptocurrency traders. The US Internal Revenue Service (IRS) also sent letters to taxpayers who might have failed to report income and pay the resulting tax from cryptocurrency transactions.
At the very core, the IRS still deems crypto assets to be property rather than currency for income tax purposes, the same as its regulatory guidance came out five years ago. That means the authority will continue to tax crypto profits and losses like those for stocks, at capital gains rates.
TaxBit CEO, Austin Woodward also commented, “We are excited to partner with Gemini in order to bring industry leading tax technology to Gemini’s platform. Gemini is making crypto taxes, something that historically has been viewed as intimidating and complex, simple.”