TaxBit, a Utah-based crypto tax firm, is attempting to lower the cost of crypto tax reporting through its TaxBit Network, which will offer users free 2021 tax forms, the company said in a press release on 11 January.
According to the announcement, the newly launched TaxBit Network is trying to democratize crypto tax calculations and tax forms by making the needed software more accessible. Users of participating platforms will be able to use the TaxBit ecosystem to generate their transaction history data for free when filing their taxes. The CEO of Binance.US, Brian Shroder, said in a statement:
“With the recent passing of the cryptocurrency tax provision in the Infrastructure Bill, proactively providing our users with the tax reporting and forms they need is an important step in our commitment to safety and compliance. Binance.US is excited to make the tax reporting process simple and free to our users through the TaxBit Network.”
The TaxBit Network is currently being supported by over 500 platforms, amongst which are major names such as PayPal, Binance.US, Coinbase, FTX.US, Gemini, Celsius Network, Blockchain.com, Paxos, OkCoin, and BlockFi. Some of the participating platforms will further simplify the access to the tax reporting tool by incorporating a quick TaxBit sign-up on their apps.
The network will significantly improve the lives of U.S. taxpayers, who are required to generate Form 8949 to show their transaction history for the past year. Taxpayers need to fill in the description of the property, the date of acquisition, sell date, and the proceeds and costs basis of every short-term transaction, which could be burdensome to crypto traders that generate thousands of transactions per year. In order to resolve this issue, many were forced to hire an accountant or buy tax software, which could set them back thousand of dollars each year.