The "big, beautiful bill" has officially been signed and put into law, which means there are some big tax changes on the horizon.

Here's a breakdown of the most relevant tax changes:🧵 1/ The highest marginal tax bracket is going to stay at 37%. It was supposed to go up to 39.6% after 12/31/25, but it's going to stay at 37% now.

This will benefit everyone, as the lowest marginal bracket is also going to stay at 12% instead of increasing to 15%.

Crypto tax rules for 2025 are changing again...

ICYMI, the biggest changes to ever happen to crypto taxes started applying on Jan 1, 2025, and then a few hours later, they changed again.

I've summarized them below (and added in details about the newest change!) 🧵 1⃣You can no longer use one single ledger to track your cost basis (universal accounting). Each wallet and exchange will now be treated as a separate ledger with cost basis tracked separately (wallet-by-wallet accounting).

This is your annual reminder that if you have gains in crypto this year, you can potentially realize up to $116,950 of gains in 2023 tax-free!

(Thread below ⬇️) Long-term capital gains (gains on crypto held for > one year) receive preferential tax treatment, meaning that they are taxed at either 0%, 15%, or 20%.

The 0% bracket is bigger than you think, and taking advantage of it is how you can cash out tax-free!

FEES!! I get a ton of questions about fees and I know that they can add up (especially if you are using ETH a lot), so let’s walk through how they impact your tax calculations…

Stay tuned because this can end up saving you a lot of money! The instructions for Form 1099-B (where information on capital gains & losses are typically reported) state that “you must reduce the proceeds by commissions and transfer taxes related to the sale” cont…

As many of you have noticed already, the first question on the 2020 tax return is, "At any time during 2020, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?"

I was just reading the IRS guidance, and here's the scoop... Answer YES if you:

- Sold crypto
- Traded crypto
- Spent crypto on goods or services
- Received an airdrop or fork
- Received staking, masternode, or other crypto rewards
- Received crypto as compensation

The house as officially passed the stimulus bill, so what does that mean for you?

As you probably already know, the checks will be $1,200 per individual and $500 per child under 16. The stimulus checks are completely tax-free and cannot be garnished to repay debts (including current outstanding debts to the IRS).

Regarding whether or not the updated guidance on the treatment of forks and airdrops as income requires you to go back and amend your previous years’ returns or not is still up in the air. When IRS Chief Counsel, Michael Desmond, was asked about retroactivity of the revenue ruling, he said “it’s a statement of the IRS’s interpretation of existing law, and in that respect you could see it as retroactive because we think that’s what the law has always provided for”

The IRS just released updated guidance on cryptocurrency. This is the first time we've received guidance from them on the subject since 2014! Link to the new guidance: irs.gov/newsroom/frequ…

More details to follow!

I've had quite a few clients receive letters from the IRS these past two weeks regarding cryptocurrency compliance.

It's a standard letter that is three pages long and basically says that the IRS has record of you owning crypto, so you better be compliant. Here are a few quotes from the letter:

"We have information that you have or had one or more accounts containing virtual currency but may not know the requirements for reporting transactions involving virtual currency"

I recently got hold of a presentation given to special agents in the IRS Criminal Investigation division that discussed investigating taxpayers who hold crypto.

I went through all of the 181 horribly formatted slides (attached for reference haha) and here's what I learned... The IRS plans to use interviews, open-source searches, electronic surveillance, social media searches, and Grand Jury subpoenas given to a variety of companies.

Due to the new 2018 tax reform the majority of people will take the standard deduction and very few people will benefit from itemizing. Reasons for this:
1. The standard deduction has almost doubled ($24K for married, $12K for single) since last year
2. You are limited to deducting only $10K ($5K if single) of state & local income & property taxes (major blow to those living in states like CA, NY, NJ, and DC)

I recently reached out to the IRS regarding FBAR reporting requirements for crypto. I just received a response and was told that if the aggregate of all of your coins on foreign exchanges was greater than $10,000 at any point in the year then you are required to file an FBAR The IRS agent also clarified that if you have coins that are stored on a digital wallet in which you have control over the private keys, that these coins would not be subject to FBAR reporting. A digital wallet is not a foreign financial account.

Have you heard of like-kind exchanges? If you have, it’s probably because you have read or heard something about them in reference to crypto and taxes. Sadly, I think there are a lot of misconceptions out there around like-kind exchanges. A lot of people think that they don’t have to report gains and losses in 2017 from their trades because they can take the 1031 like-kind exchange position.