You can make crypto a side hustle. So long as you consider all the moving parts. Feature writer jeffwilser takes us through the seven forms these tax nightmares come in from conversations with tax experts for TaxWeek, presented by turbotax:
Thabo Abbate, a CPA who does accounting for cryptocurrencies, has seen plenty of tax nightmares. But this one still gets him.
“Then the tax bill comes due,” said Abbate. The yoga instructor would have been fine if she sold her $100,000 portfolio and tucked a portion away for taxes. But of course she didn’t do that – many crypto traders don’t. Instead, she kept trading on margin. And eventually she lost all of her crypto. Welcome to the horror stories of Crypto Tax Nightmares. They usually look something like this: You mess around with crypto, you make some money, you don’t think about taxes, then the market drops and BOOM suddenly you’re underwater.with a salary of $47,000 who racked up a $50,000 tax bill – that he couldn’t pay – concluding that “I feel like I might have accidentally ruined my life.
Swenson had never traded stocks before. He had never traded forex. He had never traded anything, and he had no idea there were tax implications. He never set anything aside. And in the meantime, the price of bitcoin cratered. So when tax season rolled around, “I had to sell over half my bitcoin just to pay the bill.”
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