If you’ve invested in cryptocurrency, you already know the rules can feel confusing. As our Annapolis, MD tax lawyer can tell you, the IRS treats crypto as property, which means every sale, trade, or even purchase using digital currency may count as a taxable event. This is where working with a tax attorney can make a real difference. We are a veteran-owned law firm and are dedicated to helping each of our clients.
Reporting Crypto Transactions Accurately
When you buy and sell cryptocurrency, the IRS expects you to report all gains and losses. Even small transactions count, and failing to report them correctly can lead to penalties. Many people assume their exchange will handle the reporting, but that isn’t always the case. You’re ultimately responsible for making sure your tax return is accurate.
If you’ve used multiple platforms or traded often, keeping track of every transaction can feel overwhelming. A tax attorney helps you sort through records, organize your information, and figure out the right way to report your income. This can prevent mistakes that might draw unwanted attention from the IRS. They can also point out deductions or strategies that could lower your tax bill.
Handling Income Earned In Cryptocurrency
Another area where a tax attorney is helpful is deciding how to handle crypto received as income. For example, if you’re paid for freelance work in Bitcoin or receive tokens from staking, you’ll need to treat those as taxable income. The rules vary depending on whether you’re earning, trading, or holding your digital assets, and knowing the right way to report each type of activity can save you trouble down the road.
Planning Ahead For Future Tax Obligations
It’s also important to think about the future. If you plan to hold crypto as a long-term investment, a tax attorney can help you understand how capital gains apply when you eventually sell. They can also explain how to manage potential tax liabilities if you plan to pass digital assets to your heirs or include them in a trust. This kind of planning is especially valuable if you hold large amounts of cryptocurrency or expect its value to grow significantly.
Some people wait until they receive a letter from the IRS before asking for help, but getting advice sooner is always better. A tax attorney can guide you on reporting strategies, handle communication with the IRS if needed, and help you avoid costly penalties.
Working with our team at Crepeau Mourges gives you peace of mind knowing that your tax reporting is handled correctly and your rights are protected. If you’re dealing with cryptocurrency transactions and want to stay in good standing with the IRS, now is the time to take action. Don’t wait until tax season leaves you scrambling. We have over 40 years of legal experience. Reach out to our office today to schedule a consultation and get the support you need to move forward confidently. By taking this step, you protect yourself from costly penalties, reduce stress, and gain peace of mind knowing your finances are in capable hands.
