Crypto Tax Tips
As global scrutiny on cryptocurrency transactions grows, it's crucial to keep your crypto affairs in check. When tax season approaches, make sure you’re not caught short by following these tax tips to make reporting your crypto transactions as smooth as possible.
Reporting crypto taxes can be a headache, but that's exactly why Crypto Tax Calculator exists! We aim to make the entire experience as straightforward as possible for you, so you can spend more time on the fun things (like staring longingly at jpegs).
Do you have to pay tax on crypto in Finland?
Yes. Vero - the Finnish Tax Administration, cryptocurrencies are taxable and you’ll be required to pay tax on capital gains generated from selling, trading, or spending your crypto assets, as well as on income earned from activities like crypto mining.
How much tax you’ll pay will depend on the nature of your transactions and how much you earn. For capital gains, if your profit exceeds €1,000 but remains below €30,000, you'll be taxed at 30%. Anything above this threshold is taxed at 34%.
4 Tips to Prepare for Tax Season
Navigating the world of crypto can be exciting, but it also comes with its own set of financial complexities, particularly when it comes to taxes.
As digital assets become increasingly popular, understanding how to manage your tax obligations is crucial for maintaining compliance and optimising your returns.
To avoid finding yourself in a situation where a surprise tax bill slaps you in the face, here are some tips to prepare for tax season. Whether you’re a seasoned trader or new to the crypto space, these insights will help you stay informed and strategically manage your tax responsibilities.
Tip 1: Keep detailed records of transactions
One tip for crypto investors is to keep track of your transactions. Detailed records will not only help you accurately calculate capital gains and losses but also ensure you’re prepared for tax reporting. When calculating your crypto taxes, it’s crucial to include history from every source that you have activity on. The reason is, if you don’t provide your entire transaction history, there will be no way to determine an accurate cost basis for individual transactions. Without an accurate cost basis, your entire crypto tax return could be wrong!
Tip 2: Ensure all your wallets and accounts are synced
To accurately report your crypto transactions, it's crucial to have all your data in one place. Make sure to add all your wallets and exchange accounts to your crypto tax software. If you've previously imported accounts, take a moment to ensure they are fully synced and up-to-date. This will help you capture all your transactions, including any new ones since your last login.
Tip 3: Regularly review your transaction
It’s important to regularly review your transactions for accurate reporting. By checking your trades, sales and purchases, you can catch any discrepancies or errors early on. This proactive approach helps ensure that your records are accurate and complete, making it easier to track capital gains, losses, and overall performance.
Tip 4: Generate your tax reports and be ready to file
After completing the first three tips, you can now generate your tax reports and take a look at the numbers. CTC offers a range of different reports that give you a clear and easy-to-understand overview of your tax obligations. By taking action now and following these four tips, you'll be setting yourself up for a smooth tax filing experience.
Remember, being proactive is key to a successful tax season. By taking action now and following these four tips, you'll be setting yourself up for a smooth and stress-free experience. You may even be able to save on your tax bill. Don't wait until the last minute – start preparing today and enjoy the peace of mind that comes with knowing your crypto taxes are in order. How can Crypto Tax Calculator help? By providing you with the tools to help track your crypto transaction history, our platform lowers the chances of human error. We also work with local tax professionals in regions around the world to ensure that our algorithm’s rules are up to date with relevant legislation, meaning you will have direction as to what could or could not be a taxable event. Finally, one of our favourite features in the platform is the ‘biggest winners / biggest losers’ widget. It will identify what assets you’re holding have the best and worst growth in value since point of purchase. This can give you an idea on what assets might be relevant when looking into claiming capital losses.
Tim Brunette is the CTO of CTC, where he leads technical operations and applies his expertise in cryptography, and machine learning to solve challenging problems in the cryptocurrency ecosystem. He previously worked at Accenture, holds a Bachelor in Space Engineering and a Masters in AI.
