Coinbase and TurboTax users can now accept crypto tax reporting

[ad_1]

Select’s editorial team works independently to review financial products and write articles that we think our readers will find useful. We may receive a commission when you click on links to our affiliate partners’ products.

Crypto fans can now receive their annual tax return in over 100 different cryptocurrencies, including bitcoin and ethereum. With the help of TurboTax and Coinbase, you can turn your tax return check into any cryptocurrency or token you choose.

Select details of what you need to know about the new partnership and what to keep in mind when investing in cryptocurrencies.

Subscribe to the Select newsletter!

Our top picks delivered to your inbox. Shopping recommendations that help you improve your life, delivered weekly. Register here.

How to Get Your Cryptocurrency Tax Refund

On Thursday, Coinbase and TurboTax announced a partnership to allow customers to accept their tax return and have it automatically converted into cryptocurrency.

To get started, sign up for TurboTax and file your taxes through the Coinbase section. With TurboTax, you can file your taxes for free for simple tax returns that include W-2 earnings, earned income tax credits (EIC), and child tax credits. TurboTax also offers paid versions of its service that cater to more advanced reporting needs, such as investments and/or business income. If you don’t have a Coinbase account before filing your taxes with TurboTax, you’ll be guided through the steps to get your tax return filed with Coinbase’s bank, Metabank. If you want to start trading crypto immediately, you can create a Coinbase account here.

Once you’ve filed your taxes, it will take about three weeks to get your return, according to the IRS. Once your return is sent to you, you can convert your USD into the crypto of your choice.

TurboTax

On the TurboTax secure site

Cost

Costs may vary depending on plan selected – see breakdown by plan in description below

Free VersionMobile AppLive SupportBetter Business Bureau AssessmentProsStep-by-step guidance with an easy-to-follow question and answer formatTurboTax Live provides on-demand advice and a final review from a tax expert or CPALive Full Service has a tax expert who prepare, sign, and file your return Accuracy and maximum refund guaranteed* Audit support, which provides free assistance if you get an IRS or other tax notice Cons Costlier than other software programs Live expert support plans have additional costs

Breakdown of costs by package:

Free (for simple returns** only): $0 federal, $0 stateDeluxe (helps you maximize credits and deductions): $39* federal, $39* statePremier (includes returns with investments and expenses) : $69* federal, $39* per stateSelf-employee (for personal and business income and expenses): $89* federal, $39* per stateLive Basic (includes assistance from tax experts): for a limited time , $0* federal, state included – simple tax returns only; must file by 3/31Live Deluxe (includes tax expert assistance): $119* federal, $49* stateLive Premier (includes tax expert assistance): $169* federal, $49* state StateLive Independent (includes tax expert help): $199* federal, $49* stateFull Service Live Basic (includes tax expert help): for a limited time, $0* federal, state included – simple tax returns only; must file by 2/15 Full Service Live Deluxe (includes tax expert assistance): $249* federal, $49* stateFull Service Live Premier (includes tax expert assistance): $359* federal , $49* stateFull Service Live Self-Employed (includes assistance from tax experts): $389* federal, $49* state

*Click here for TurboTax offer details and disclosures

** A simple tax return is Form 1040 only.

What to keep in mind with cryptocurrency

If you decide to take your tax return and invest in cryptocurrency, it is important to be aware of the risks.

First, cryptocurrency prices are volatile. In the past few months alone, bitcoin and ethereum prices have fallen about 50% from their all-time highs. So if you need your tax return to pay off debt or invest for your retirement, it may be best to avoid converting your tax return to cryptocurrency.

Second, crypto theft is a real problem. About $14 billion worth of cryptocurrency was stolen last year, and unlike other financial products like credit cards, there aren’t many safeguards in place for crypto owners. And while Coinbase is one of the most reputable cryptocurrency exchanges available, they are not immune to foul play. Last year, he sent out an email saying that 6,000 users had crypto stolen from their digital wallets. So, by owning a crypto, you take the risk of having it stolen.

Finally, regulatory action by the federal government is expected in 2022, which could significantly affect the operation of cryptocurrency in the United States. Although there are different speculations about what could happen, these actions could in turn affect the value of your crypto holdings.

At the end of the line

Editorial Note: Any opinions, analyses, criticisms or recommendations expressed in this article are those of Select’s editorial staff only and have not been reviewed, endorsed or otherwise endorsed by any third party.

[ad_2]