If you put money into cryptocurrency last year, you may be in for a rude awakening when it’s time to do your taxes. If you are a newbie in Bitcoin trading, check out the Bitcoin price prediction.
Yes, you do have to pay taxes on your Bitcoin, Ethereum, and other cryptocurrencies. For tax purposes, the IRS looks at cryptocurrency as “property.” This means you must pay taxes on your virtual currency, just like on stocks or gold.
April 18 was the last day you could file your taxes for 2021 or ask for more time. If you asked for more time, you would have until October 17, 2022, to file.
2021 was a big year for cryptocurrencies because many new investors bought them for the first time. Grayscale Investments did a study and found that more than half of the people who invest in Bitcoin did so in the past year. During 2018, the crypto market hit several all-time highs and lows, which caused many investors to make or lose a lot of money.
CoinDesk says that the most popular cryptocurrency, BTCUSD, -1.17 percent, reached a high of $24,412 on Friday. This was the first time since June 13 that it had been this high. The prices of Bitcoin and Ether have increased by more than 19% and more than 50%, respectively, so far this month. ETHUSD, -1.53 percent
Still, both bitcoin and ether are now 65 percent less expensive than they were a year ago when they were at their most expensive. Experts at NYDIG say that the number of outstanding derivative contracts has gone up since open interest in bitcoin futures and options hit a low point recently. But it is nowhere near the highest it has ever been.
The neutrality of rates for perpetual swap financing has also stayed mostly the same, according to data from Coinglass. When the funding rate is positive, it is often seen as a sign that investors are willing to pay for long positions, which is bullish. When the funding rate is negative, on the other hand, this is often seen as a sign that the market will go down.
In their report, analysts said that funding rates are still low even though they seem to be going up, showing that traders don’t want to make direct bets.
Will Clemente, an analyst at Blockware Solutions, says that from a technical point of view, one of the most important things to keep an eye on is whether or not bitcoin can trade above its 200-week moving average before the end of this week. Right now, this number is $22,800.
The US Senate has begun discussing a new bill that would lower taxes on small cryptocurrency transactions. Dubbed the Virtual Currency Tax Fairness Act, the bill seeks to exclude small crypto transactions from capital gains tax requirements.
The Internal Revenue Service (IRS) considers cryptocurrency as property and cryptocurrency transactions as investments instead of payments. This means that if an American buys, sells, or trades bitcoin, he or she must keep track of and pay capital gains taxes.
Because of this, the asset class can’t be used as easily in normal trade as it once could. Because of this, many critics and government officials say that cryptocurrencies shouldn’t be used as money.
Similar things have been asked of Congress before. Representatives Suzan DelBene, David Schweikert, Darren Soto, and Tom Emmer all put forward similar bills in February. The standard level was set at $200.
In June, Senators Kirsten Gillibrand and Cynthia Lummis introduced a broad crypto bill that would, among other things, lower taxes on all crypto transactions under $200. The bill was meant to lower taxes on cryptocurrency transactions worth less than $200.
Senator Toomey said that he, too, would not run for office again. This means that he won’t be in office for the next session of Congress and won’t be able to work on getting the bill passed.
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