2021-03-11 21:22:01

TurboTax Explains Tax Rules for Cryptocurrency

Cryptocurrencies have become a common part of our vernacular these days, so it shouldn’t come as a surprise that there is IRS guidance on their taxability.

So keep track of your trades, your income, and the people you pay using this stuff. Because it is all reportable to Uncle Sam.

A cryptocurrency is a digital currency that can be used to buy goods and services and is basically taxed in three different ways.

1. When you pay someone or get paid in crypto.

If you are an employee who gets paid in crypto, like say Bitcoin, it will be reported on your W-2, much like a regular wage. If you are an independent contractor paid in crypto it will be reported on a Form 1099 – much like your other contracted jobs, says Lisa Greene-Lewis TurboTax ( (INTU) – Get Report) expert and CPA.

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