Do you need to Submit Tax Forms to Litebit? Anything you need to Know about Taxation in LiteBit

According to the IRS rules in 2014 about the tax fee for Cryptocurrency, Crypto coin is considered the capital assets such as bonds or stocks. It is not categorized as a currency at all. This decision led the debates and arguments among the people that having and concern about Cryptocurrencies. Why? Because it gives some blurry understanding about the tax that charged upon the Cryptos. 

Generally, the capital asset is charged by the tax fee whenever the asset is being sold for some money or the other goods as the exchange. In practice, whenever you buy a Cryptocurrency, you will pay as the exchange for the coins you buy, isn't it? And by that reason, the government is categorizing Cryptocurrency as a capital asset similar to stocks. 

For example, you once buy a Bitcoin for $50 per coin. Instead of selling it, you keep it until the price increases to $700 per coin. Now your coin is worth $700, and you spend it to buy some clothes. For the people in IRS, the $50 from your $700 is fine, but the $650 else is the profit that you get from your Bitcoin. Thus, it will be charged the tax as the capital asset even if you use that Bitcoin to buy some new clothes instead of selling it in the literal meaning.

Jeff Hoopes, a senior professor from the University of North Carolina, stated that categorizing Cryptocurrency as a capital asset is because of the people's behavior that keeping the coin and using it at the perfect moment when the price is rising. That led the people in IRS to see it as the same thing with the stocks.

The fact is, people are doing that thing in most cases. Bitcoin is the new form of stocks, and people threaten it so. Hence, it is a normal thing if IRS is creating rules that regulating the taxes on Cryptocurrencies. 

Now let's go back to the main question, do you need to Submit Tax Forms to Litebit? The answer is no. According to the terms and conditions on Litebit, you don't have to send your tax form to this platform. Nonetheless, LiteBit has the right to send your tax information about the transaction activity that you do on the LiteBit platform to the tax authority if it is asked.

How do I pay tax on Cryptocurrency?

Paying the tax is not always inefficient such as waiting in line in front of their office. Today, you can pay taxes by using the application online on your desktop or your mobile phone. The first thing to do is creating an account on the official website of the IRS. The billing or payment option offered on that website is various, starting from debit, credit, and so on. In case you cannot pay your tax on that platform, you can make some advance settings by proposing the other payment method on the website or coming to their office during the workday to set it up. 

You can also use some application and software that we recommend to you as the platform that can help you to pay or manage your tax o Cryptocurrencies:

Crypto Tax Software

When you want to manage your Crypto tax online, Cryptocurrency tax software is the best choice that you can use it. If you install this software, this program will help you create the crypto tax report immediately once you buy or purchase the Cryptocurrencies.

This application is integrated with your financial platforms such as wallets or e-wallets, Defi, and Blockchains. This application will work automatically by reading all of your purchase histories and also automatically create a report about it.

How Crypto Tax Software Works

Do you have to pay taxes on crypto if you don't sell?

The answer is no. Indeed, Bitcoin is treated the same as the other Cryptocurrencies since Bitcoin is the Cryptocurrency per se. IRS will always put their eye on your Bitcoin, and once you make a transaction with your coin, you will immediately owe the tax to IRS. The case will be different if you just own it and keep it instead of selling it or use it for commercial purposes. You cannot be charged with the tax if you are just keeping it on your e-wallet.

Nonetheless, don't you ever play a trick on IRS. Why? Because they are having a system that watching the Bitcoin network 24/7. Thus, any transaction will be immediately identified as you start performing the transaction. In the end, you can check the bill that you should pay over the tax on your application, but if you don't do that, relax; IRS will send the notification to your doorstep. 

Litebit Contact

You can always contact LiteBit for further information about Crypto trading or Crypto taxation. The customer service is always on the line to pick up your calls and help or guide you to solve any of your questions regarding Cryptocurrency. Here is the detailed information about LiteBit:

2525 Ventures BV. Weena 740, 15th floor. 3014 DA Rotterdam. The Netherlands

+31 (0) 10 310 41 75

Author(s): Alizay Khan
Published at: 01 Apr 2021 03:56 GMT
Original link (login required): https://ilde2.upf.edu/levinsky/pg/lds/view/8855/