From Nasdaq: 2024-04-15 15:41:15

1. Many individuals treat digital cryptocurrency differently than traditional earnings, especially during tax season. CPA experts stress the importance of reporting all digital asset-related income on tax returns to avoid fines and penalties, with IRS oversight expanding as crypto transactions increase in popularity.
2. Crypto traders frequently make the error of assuming that digital transactions go undetected by the IRS, risking potential penalties by failing to report cryptocurrency activity on tax returns. Regulations require reporting all income from digital assets, including convertible virtual currency and non-fungible tokens.
3. Common mistakes made by crypto traders include not filing crypto transactions, failing to treat crypto as property for tax purposes, and neglecting to report crypto exchanged for goods and services. Proper record-keeping and understanding tax implications are crucial to avoiding penalties and ensuring compliance.
4. Taxpayers must report income from airdrops, forks, and splits of new cryptocurrencies, in accordance with IRS regulations. Accurate record-keeping of all crypto transactions throughout the year is essential for calculating tax liabilities, avoiding penalties, and complying with tax laws.

Read more at Nasdaq: I’m a Certified Accountant — Don’t Make These 5 Tax Filing Mistakes on Crypto Earnings