As the tax season approaches, TurboTax assures that its don't have to deal with another refund check this year as it gives them the option to receive it in cryptocurrency.
Through a partnership with Coinbase, the largest crypto exchange platform in the United States, TurboTax is helping its users receive both their federal and state refunds in crypto.
According to New York Times, the partnership comes with a direct deposit program that will send their tax refunds to their Coinbase accounts, where they have the option to automatically convert dollars into any of the 100 types of cryptocurrency available.
If they choose to receive the refund in cryptocurrency, they will not be charged any trading fees, according to Engadget. However, if they decide to receive the refunds in USD first, they will still have an option to convert them to cryptocurrency later on.
Coinbase has demonstrated a dedication to its aim of promoting global economic freedom. Before this announcement, it can be remembered that it partnered with CoinTracker to make tax filing easier for its users.
With that, users could get free tax reports for up to 3,000 transactions via CoinTracker.
How It Works
Upholding its commitment to helping users have easy options for this tax season, TurboTax boasts on its website a page that offers assistance to users, starting with helping them create a Coinbase account if they do not have one.
According to TurboTax, users may now import up to 250 Coinbase transactions into TurboTax Premier all at once using compatible .csv files.
And since the uploaded files will include the cost basis of the user's Coinbase transactions, TurboTax will be able to help them file cryptocurrency transactions easily.
Meanwhile, it is also important to know how crypto and taxes work. Of course, one of the most important things to keep in mind is that it is an individual's duty to monitor any potentially taxable activities and the fair market value of crypto during those transactions.
What You Need To Know About Crypto And Tax
According to TurboTax, examples of taxable crypto transactions are:
1. Selling cryptocurrency for fiat money (e.g., USD, EUR)
2. Trading cryptocurrency for other cryptocurrencies
3. Using cryptocurrency to buy a good or service
Meanwhile, non-taxable crypto transactions are:
1. Buying cryptocurrency with fiat currency
2. Donating cryptocurrency to a tax-exempt organization
3. Gifting cryptocurrency to anyone
4. Transferring cryptocurrency to another wallet that the user owns
To receive the tax refunds through Coinbase, one just simply needs to follow these steps:
- Go to the Coinbase section of TurboTax's website and file taxes. They offer assistance for this.
- Set up a direct deposit account
- Decide whether to receive the refund in cryptocurrency or fiat
- Enter Coinbase account and routing numbers
Above all these, the best thing to do is to start preparing as early as now and do not wait until the actual day.
