Crypto Tax Calculator, a software designed to assist crypto investors and traders, has integrated its services with FTX crypto exchange. This integration will help FTX users to solve their tax reporting nightmare without much interaction with excel sheets. Notably, the Crypto Tax Calculator tax reporting services supports 21 jurisdictions, including the U.S. and Australia, amongst other prominent countries.
The move to integrate with FTX comes when tax authorities are narrowing down on crypto activity, warning crypto users to file their taxes per local reporting laws. One of the tax authorities that appears to be paying extra focus is the U.S Internal Revenue Service (IRS), which recently requested $32 million in its 2022 Fiscal Budget to strengthen crypto tax enforcement.
The IRS has gone to the extent of acquiring court orders to issue ‘John Doe’ summons to crypto firms such as Circle, which owns Poloniex exchange. According to IRS Commissioner Chuck Rettig, the move to issue John Doe summons is a step towards catching crypto tax evaders,
“The John Doe summons is a step to enable the IRS to uncover those who are failing to properly report their virtual currency transactions.”
A Seamless Way to Report Crypto Taxes
With authorities on the heels of crypto stakeholders, it is becoming evident that the long-term play will be tax compliant ecosystems. Solutions such as the Crypto Tax Calculator have been designed to address this gap specifically. The platform’s integration with FTX crypto exchange will expose the exchange’s users to seamless tax reporting services.
Some of the functionalities that FTX users will be able to access include automatic transaction sorting. Ideally, the crypto tax calculator software enables users to categorize crypto transactions according to various niches. This functionality comes in handy in an era where the crypto market is fragmented into multiple ecosystems such as Decentralized Finance (DeFi), Non-fungible tokens (NFTs) and Initial Exchange Offerings (IEO).
In addition, the crypto tax calculator allows users to generate financial reports dating as far as 2013. These reports are presented in an accountant-friendly format to enable users to consult with their local experts. Simply put, FTX crypto traders will be able to avoid the hustle of explaining their crypto transactions to a local accountant.
Apart from FTX, this crypto tax software supports other exchanges such as Coinbase, Bitfinex and Binance. The platform also features direct CSV and APIs, which allow users to integrate data from hundreds of sources in the crypto ecosystem, including digital wallets and native blockchain networks.
While many crypto users may be tempted to avoid taxes, the obligation to abide by the law is not an option. Tax regimes have existed time immemorial and are not about to become extinct anytime soon; after all, that’s how governments service their expenditure. With cryptocurrencies now in the picture, authorities have an opportunity to increase their collection.
That being the case, crypto users will be better off complying with their tax obligations. Softwares such as the crypto tax calculator are a perfect starting point to streamline reporting or keep proper records for future reporting references.