Heads up, crypto investors! The IRS is making BIG changes starting Jan 1, 2025, and if you don’t prep now, you could pay more in taxes or face penalties. Here’s what you need to do before the year-end to avoid penalties, save money, and stay ahead of the game. 🧵

Do you need a special "crypto accountant" to file your taxes? Here's everything you need to know👇 (Disclaimer: I don't practice anymore. I have nothing to gain from this thread other than sharing the truth) 1/ Who are crypto accountants (CAs)? Tax pros who can apply common

Missing cost basis

Max capital gains tax on crypto - 20% Max capital gains tax on NFTs (collectibles) - 28% Also, add 3.8% Net Investment Income tax to the above.

Your zero-to-hero story is your best resume.

Missing cost basis

2/ What’s NOT taxable? 🚫 Transfers between your wallets & exchange accounts 🚫 Sending/receiving crypto gifts 🚫 Crypto cash-back rewards You still need to track these even though you don't have to report them to the IRS.

Crypto tax 101 - What's taxable and what's not? 1/ What’s taxable? ✅ Selling crypto for fiat ✅ Trading one coin for another ✅ Spending crypto on goods/services ✅ Earning crypto (staking, mining, rewards, etc.) ✅ Airdrops & hard forks If you had any of these transactions,

Income is taxed at the time of receipt. Wealth is not taxed at the time of receipt. The rich understands the latter better.

@coinbase @Gemini 6/ Record-keeping is important. Log the timestamp + FMV at receipt (that’s your basis) and the proceeds when you dispose. Software like @CoinTracker makes this painless.

@coinbase @Gemini 5/ Edge cases (don’t mix these up): Sign-up bonuses not tied to spend (e.g., “open account, get $200 in crypto”) → generally taxable income at receipt. Yield/interest/staking-type rewards tied to cards → typically taxable at receipt.

@coinbase @Gemini 4/ Compare to cash back: Cash back = non-taxable at receipt. But, cash is not an appreciating asset, so no upside for you. Crypto back = non-taxable at receipt and generally appreciating in value.

@coinbase @Gemini 3/ Focus on the holding period to minimize taxes The holding period starts the moment you receive the reward. ≤ 1 year = short-term capital gain. 1 year = long-term capital gain. So, keep the rewards for at least 1 year and sell to minimize your taxes.

@coinbase @Gemini 2/ Example: Spend $1,000, get 0.0005 BTC (worth $20) You don't have to pay taxes on this "free" BTC. Basis of 0.0005 BTC = $20. If you later sell this BTC lot for $30, you will have a capital gain of $10 ($30 - $20). You have to pay taxes here.

@coinbase @Gemini 1/ Crypto credit card rewards are NOT taxed when you earn them. They’re treated like purchase rebates. So, no ordinary income upon receipt. Your cost basis = FMV of the crypto at the moment you receive it. You owe tax only when you dispose (sell/swap/spend) these rewards in

Earning @coinbase or @Gemini credit card rewards? If so, this is a major tax loophole & personal finance hack 🧵

If you don't file a return, you give the IRS UNLIMITED time to come and audit you. If you file a return, you only give the IRS a 3-year window to come and audit you. Filing something is better than filing nothing! This concept is known as the statute of limitations.

Rewards received from crypto debit/credit cards are not taxable upon receipt. This is because cash/crypto back is considered not income. It's an adjustment to the purchase price. Market value at the time of receipt = your cost basis. When you later sell them, you will have a

It's okay to be worried about people who don't hold any crypto. Cz I am.

They said no tax on tips -- > who pays taxes on tips anyway? Now they want no taxes on gambling income --> who pays taxes on gambling income anyway? Vanity headlines.

Finding a crypto-savvy accountant is harder than finding the next 100X coin. Comment here if you are looking for one and wanna know the criteria for finding a good one!