Think Cryptocurrency Is Confusing? Try Paying Taxes on It<br />“I’ve lost sleep over it,” said Shaun, a trader who said he was still figuring out<br />how to properly account for last year’s cryptocurrency profits on his taxes.<br />They’re afraid that the windfall profits created by last year’s cryptocurrency boom, which sent currencies like Bitcoin<br />and Ether skyrocketing and created a new class of crypto-millionaires, have left them with huge tax bills.<br />With this year’s April 17 tax filing deadline fast approaching, many virtual currency traders are sweating over their tax returns.<br />When they find out they owe taxes on their cryptocurrency trades, she said, “a lot of people are kind of shocked.”<br />Part of what makes paying cryptocurrency taxes so difficult is that current I. R.S.<br />Last year, Happy Tax opened a separate cryptocurrency division, Crypto Tax Prep, which already<br />has several thousand clients and is the fastest-growing segment of his business.<br />“Now they’re stuck with these huge tax bills, and they don’t have the capital to pay it.”<br />Faced with such problems, some cryptocurrency traders have decided to avoid the issue<br />entirely, by not declaring any cryptocurrency on their taxes and hoping for the best<br />Mario Costanz, the chief executive of the tax preparation firm Happy Tax, told me<br />that an influx of cryptocurrency trading clients had helped his business more than triple in the past year.
