Cryptocurrency adding confusion to tax season

 

MISHAWAKA, Ind. -- With tax season in full swing, cryptocurrency could create confusion when it comes to filing your 2021 taxes.

Last year, there were record breaking numbers in cryptocurrency values and plenty of interested investors.

Financial experts state that cryptocurrencies are considered as taxed property. If an individual sold any forms of cryptocurrency in 2021 they must report it as earned income on a 1099 or 1040 form.

“You might not like the result, especially with crypto activity. Realize I have to pay more tax on this than I was really anticipating, and so planning is the other side of this. Proactively looking and seeing what my tax bill looks like and what opportunities exist for me to improve my tax situation. That could be contributing to an IRA, that could be making some other adjustments to lessen the tax burden” said Mike Bernard, Certified Financial Planner, Korhorn Financial Group.

Bernard predicts out of the 4,000 Korhorn clients that 20% will have questions about or will be involved in cryptocurrency.

If you have any questions while filing your taxes for sold cryptocurrency, we recommend you reach out to a local expert. The filing period ends April 18.