U.S. Crypto Tax Overview for 2021

The following post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga.

Crypto tax season is just around the corner and the IRS is back on the prowl. For many in the crypto-space 2020 has been a year of plenty, with crypto-veterans and newbies basking in profit-induced highs. However, if you want to ensure that your trip remains one worth remembering, navigating the bureaucratic swamp of crypto taxes is a must. Here is an overview of the state of U.S. crypto taxes in 2021 to help you on your way! 

The first helpful piece of advice to help you on your journey out of the woods are the key U.S. tax season dates: 

• Friday, February 12th. IRS begins 2021 tax season. Individual tax returns start being accepted, and processing begins.
• Thursday, April 15th. Due date for filing 2020 tax returns or requesting extension of time to file.
• Thursday, April 15th. Due date for paying 2020 tax owed to avoid owing interest and penalties.
• Friday, October 15th. Due date to file for those requesting an extension on their 2020 tax returns. 

In addition to some of the key dates you should mark down in your calendar, its important to remember that: 

Individual income tax returns are due on April 15th which is on a Thursday this year and will not be impacted by the weekend or holidays.

LLC and Partnership returns (IRS Form 1065) are due March 15th, 2021. The extended deadline is September 15th, 2021.

C-corporation income tax returns (IRS Form 1120) are due April 15th, 2021, for C-corporations that operate on a calendar year. The extended deadline is October 15th, 2021. 

S-corporation returns (IRS Form 1120-S) are due March 15th, 2021, for corporations operating on a calendar year. The extended deadline is September 15th, 2021. 
Foreign partnership returns are due on the same date as other partnership returns on March 15th, 2021. 

For those of you wishing to find out what the tax filing deadlines are in your state, we have included the Complete State Tax Extensions List here. 

Remember, the state crypto tax returns are due on the same date as the federal tax returns. However, some states allow you to file your taxes at the federal level. Conversely, other states may allow you to file an extension at the federal level.

See also: Best Cryptocurrency

In addition to providing an overview of the regulatory landscape that you will have to traverse when filing your crypto taxes,  we have also included a list of things worth knowing about your 2021 crypto tax return. 

1. Whenever you trade one cryptocurrency for another, then the gain on the value of the first currency will be taxed. 
2. Everyone should answer yes to the new virtual currency Form 1040 question.
3. Airdrops and interest from staking and lending are taxed as ordinary income at the fair Market value in US dollars on the day received. 
4. You’re taxed on your net gains. Net gains are your gains minus your losses for the year. Therefore, you should report all losses to reduce your taxes.
5. It’s almost impossible to calculate your crypto gains without using a crypto gain calculation service like Accointing.com.  
6. If you get a 1099K from any US exchange, your tax return needs to account for all the trades you did during the year. Otherwise, you are asking for an IRS audit. 

We strongly believe with this information in hand, your crypto tax journey will be smooth sailing. If you have additional questions or wish to discuss a more detailed plan on how you can file your taxes efficiently and correctly, we highly recommend getting in touch with Accointing.com and our U.S. crypto tax partner Clinton Donnelly a.k.a The Crypto Tax Fixer!

The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice.