Altcoin Opportunities

Tag: crypto tax reporting

  • Crypto Tax Software: Cover Your Digital Ass(ets)

    Crypto Tax Software: Cover Your Digital Ass(ets)

    In this article, we’ll explore the world of crypto tax software and how it can help you stay compliant with the tax regulations.

    Cryptocurrencies have taken the world by storm. They are digital currencies that operate independently of a central bank and can be used to purchase goods and services online.

    computer monitor with profit and loss tracking
    It’s up to you to report your trading profits and losses correctly

    Crypto tax software is the first tool that every new cryptocurrency investor and trader needs in order to stay compliant with tax laws.

    While crypto enthusiasts are enjoying the flexibility and opportunity offered by these currencies, the tax authorities are not left behind.

    The IMF has issued guidelines for government taxation of virtual currencies, and dedicated special funding to ensure compliance.

    It’s only a matter of time before other governments follow suit.

    This means that if you own a cryptocurrency portfolio, you have to keep track of your digital assets for tax purposes.

    Get Country Specific Tax Help

    The your country may considers cryptocurrency to be property, or may consider it to be a commodity. Which means that any gains or losses from the sale or exchange of virtual currencies are subject to capital gains tax.

    This applies to all digital currencies, including Bitcoin, Ethereum, Litecoin, and others. The complexity of the crypto tax regulations has led to the development of specialized software that can help investors and traders stay compliant with the tax laws.

    Start now to automate the process of calculating taxes on digital assets and generate your own tax reports that can be provided to your bookkeeper and used for filing tax returns.

    What is Crypto Tax Software?

    Crypto tax software is a tool that helps cryptocurrency investors and traders calculate their tax liabilities. It works by analyzing your transaction history and applying the relevant tax laws to calculate the gains or losses on your digital assets.

    The software is designed to simplify the tax reporting process, which can be very complicated, especially if you have many defi transactions with staking, trading the best crypto projects, flipping NFTs for profit, and so much more.

    With crypto tax software, you can generate tax reports, including Form 8949, Schedule D, and other relevant forms required for tax reporting.

    its easier than you think to use the crypto tax software

    Benefits of Crypto Tax Software

    Using crypto tax software has many benefits, including:

    • Accurate Tax Reporting: Crypto tax software uses advanced algorithms to analyze your transaction history and accurately calculate your tax liabilities. This reduces the risk of errors and ensures that you are filing your tax returns correctly.
    • Time-Saving: These new software can automate much of the process of calculating taxes, which saves you time and effort. You don’t have to manually calculate your gains or losses or worry about keeping track of your transactions.
    • Cost-Effective: Hiring a tax professional to help you with crypto tax reporting is recommended, yet you can complete much of the preparation in advance with the new crypto tax tools. This is more cost-effective and individuals and businesses of all sizes will have a better grip on how their crypto investments may affect their taxes.
    • Easy to Use: Most software is user-friendly and easy to use. You don’t need to be a tax expert or have any technical skills to use it.

    Features to Look for in Crypto Tax Software

    When choosing tax software, there are several features that you should look for as a crypto investor, such as:

    • Integration with Crypto Exchanges: The software should be able to integrate with the crypto exchanges you use to import your transaction history.
    • Accurate Tax Calculations: The software should use accurate algorithms to calculate your tax liabilities based on the tax laws in your country.
    • Multi-Currency Support: The platform should be able to handle multiple digital currencies, including Bitcoin, Ethereum, Litecoin, and others.
    • Tax Reporting: The app should generate tax reports, including Form 8949, Schedule D, and other relevant forms required for tax reporting.

    How to Choose the Right One

    Choosing the right crypto tax service can be a daunting task, given the variety of options available in the market. Here are some tips to help you choose the right software for your crypto tax reporting needs:

    1. Does it support the crypto exchanges you use?
    2. Does it cover the tax laws in your country?
    3. Check if the software offers a free trial.

    Top Crypto Tax Software in the Market

    cointracking - top rated crypto tax reporting tool
    CoinTracking Crypto Tax Reporting Tool

    Here are some of the top tax software for cryptocurrency investing

    1. CoinTracking is the number one rated software.

    CoinTracking is a comprehensive crypto profit/loss tracking platform that supports over 8,000 digital currencies and 300 crypto exchanges. It offers accurate tax calculations and generates tax reports for various countries.

    1. CryptoTrader.Tax: CryptoTrader.Tax is a user-friendly software that supports over 100 crypto exchanges. It offers accurate tax calculations and generates tax reports for various countries.
    2. ZenLedger: ZenLedger supports over 400 crypto exchanges and offers multi-currency support. It offers accurate tax calculations and generates tax reports for various countries.
    3. TokenTax: TokenTax supports over 300 crypto exchanges and offers multi-currency support. It offers accurate tax calculations and generates tax reports for various countries.
    4. Koinly: Koinly supports over 6,000 digital currencies and 300 crypto exchanges. It offers accurate tax calculations and generates tax reports for various countries.

    How to Use Crypto Tax Software

    Using crypto tax tools is relatively easy. Here’s how to get started fast:

    1. Sign up for CoinTracking and connect the crypto exchange API.
    2. Import your transaction history into the software.
    3. Review and categorize your transactions.
    4. Generate tax reports.
    5. File your tax returns.

    Tips for Accurate Crypto Tax Reporting

    Here are some tips for accurate crypto tax reporting:

    1. Keep track of your transaction history.
    2. Be consistent with your categorization of transactions.
    3. Seek the help of a tax professional to verify every aspect of crypto tax reporting.

    Common Mistakes to Avoid

    Important mistakes to avoid in crypto tax reporting:

    1. Failure to report all crypto transactions.
    2. Inaccurate categorization of transactions.
    3. Failure to report crypto-to-crypto transactions.
    4. Failure to report mining income.

    Future of Crypto Tax Software

    It automates the process of calculating taxes on digital assets and generates tax reports that can be used for filing tax returns. When choosing crypto tax tool, it’s essential to look for software that offers accurate tax calculations, multi-currency support, and excellent customer support

  • How To Build a Crypto Portfolio

    How To Build a Crypto Portfolio

    Build a crypto portfolio at the right time you can make huge gains from each AltSeason. After plotting out every Altcoin Season over the past four years, our team came up with a list of things to consider when building out a diversified crypto portfolio in a trend following trading plan.

    Your Big Picture Plan

    Asset allocation: Use a percentage approach to diversify your total assets into different investment pools, cash savings, precious metals, revenue generating assets, stocks and an investment pool into crypto. Crypto is amazing, crypto is great… AND we also need a broad financial plan.

    Your investment pool in crypto may only represent 20% of your overall wealth. And the crypto investment strategy should include a trading plan based on price change and a distribution plan to diversify crypto profits to assure your personal long term wealth and financial security.

    If you are 100% focused on crypto, start making a plan to invest your profits into a small revenue generating asset. For example, purchase a hardware computer as a passive income generating strategy like providing computing power or cloud storage…

    Your Best Crypto Portfolio

    Risk management is our job as traders. As we plan to build the list of best cryptocurrencies to hold in 2023, we’ll start out with small position sizes across many different coins.

    Getting Set Up

    Here are a few points to check off as you prepare to build your next crypto portfolio:

    1. Position sizing: Consider smaller position sizes across more markets. Less than 2% of your crypto investment pool into any one coin or token.
    2. Risk management: Consider your stop loss order as the ‘insurance fee’ you are willing to pay to have your money watch that price chart. Our job is to limit potential losses and protect capital.
    3. Market selection: Selecting markets that pass our AltSeason TradingView Indicator are likely to continue to trend and increase the chances of holding the best performing coins in 2023.
    4. Diversify across blockchains: research the top dApp projects on each Layer1 Protocol to help improve exposure to industry disrupting technologies.
    5. Time horizon: Take time off the table when building a diversified portfolio and simply follow the ebb and flow of altcoin season.

    Your Crypto Profits

    Altcoin Seasons come and go. After every altcoin season is finished and we’ve closed most of our trades, it’s time to move those profits. Crypto seasons come and go once or twice each year and we can begin to plan that assumption into our long term financial plan of becoming a crypto millionaire.

    1. Tax implications: Tax implications of a trend following portfolio are more likely to fall under long-term capital gains. Be informed. We recommend CoinTracking as a tool that every crypto trader should use to generate sample tax reports.
    2. Rebalancing: Only rebalance your crypto portfolio as more markets are passing our Altcoin Season entry or exit signals to optimize returns over time. The Crypto SmartWatch Daily Action Matrix can save you hours of chart scanning every week!
    3. Monitoring: Regularly monitor the performance of the crypto portfolio. Send profits off exchange. Be sure to own a cold storage hardware wallet and we recommend keeping that hardware wallet in a safety deposit box in a bank vault.

    Leverage Not Required

    Avoid the use of leverage: Careful consideration should be given to the use of leverage, as it can magnify both gains and losses. The random volatile nature of crypto is enough to ruin good trades – even if you are right – when leverage is added to crypto trading.

    When To Get In

    To understand altcoin season, it’s important to understand how Bitcoin Dominance and Altcoin Season are related and what other tools may give a more clear picture.

    Watch the progression of Altcoin Season

    The following sequence of pie charts show the approach of the January 2023 mini bull market in altcoin prices. The surge of price bullishness can be observed as the number of ALERT status coins increased day by day.

    When To Get Out

    Your exit signal is the most overlooked part of the trading plan for new traders. Pro Traders know that managing risk is our only job, and must know all your exit signals as a reflexive, memorized habit.

    The Crypto SmartWatch control panel and daily action matrix make it easy to stay in tune with altcoin season as it passes.

    Let go of those coins (yes, even let go of those amazing projects) that drop below the exit criteria. Let go of them with confidence… because our trend following system will pick them up again later.

    AltSeason Waves

    The Pie Charts above can also be plotted over time to give us a deeper understanding of the Altcoin Season momentum.

    The Crypto SmartWatch is an objective crypto portfolio tool that can help us focus our attention onto the segment of the 100’s of Altcoins to find those projects that have best investor interest and perhaps build a crypto portfolio full of the best cryptocurrencies to hold for 2023.