According to data from Credit Karma, fewer than 100 Americans out of the 250,000 who have already filed federal taxes have reported their cryptocurrency assets to the IRS. This figure might be cause for concern for the US tax authorities. Thus far, figures show that about 57 percent of the 2000 Americans that took part in the survey had made some gains via crypto. The same company, Credit Karma, which revealed the number of Americans that had filed taxes via its systems, conducted the survey.
According to further questions asked in the poll, about 57 percent said that they had never reported gains they made from crypto trading to the IRS. The survey also showed that about half of all those who were interviewed understood that owning crypto should have an effect on their taxes.
According to the Internal Revenue Service, any crypto such as Bitcoin is considered property. Thus, everyone who owns it is expected to pay federal taxes on it. Thus, any losses or profits from the sale of virtual currency should be considered and reported as capital losses or gains on tax forms.
Crypto Has Been on the Rise
The trade in cryptocurrencies surged in 2017. There was a rally that saw their prices rise by over a thousand percent. For instance, one Bitcoin today costs over $8000. Just a year ago, the price was just $1000.
Despite this surge, the authorities are not yet clear on who owns and trades in digital currencies. This is because they are bought and sold online. In some cases, Americans do not use their real names, which make tracking them almost impossible. For instance, Coinbase, the US exchange, has over 10 million traders. However, it is not known how many of those are from the US.
The GM at Credit Karma Tax, Jagjit Chawla, said that the company did not find it surprising that few people had reported crypto gains. According to him, those with complex tax situations usually tended to wait until it was close to the deadline. He also added,
However, given the popularity of bitcoin and cryptocurrencies in 2017, we’d expect more people to be reporting.
The deadline to file tax this year has been set for April 17th. According to the IRS projections, it is estimated that about 256 million people will file their taxes this year. Last year, about a million people filed their taxes via Credit Karma. It is worth noting that failing to file taxes for crypto is considered tax evasion. It could be especially risky if the person involved has made millions from the sale of crypto. The authorities will no doubt track them down.
Image Credit: Deposit Photos
What do you think about the current figures from Credit Karma on crypto? Leave us your thoughts in the comments section below.