Crypto tax experts Dennis Wohlfarth of Accointing by Glassnode, and Clinton Donnelly of CryptoTaxAudit, address questions that U.S. taxpayers are asking about crypto taxes during this AMA (Ask Me Anything) session.
Two of the top crypto tax experts came together to talk about U.S. crypto taxes in a YouTube live event, Dennis Wohlfarth, CEO of Accointing by Glassnode, and Clinton Donnelly, President and Founder of CryptoTaxAudit. Many topics were covered.
Questions answered included:
Questions answered included:
Questions answered included:
Questions answered included:
Questions were answered about all of these important crypto tax topics in this extended Ask-Me-Anything session.
According to Dennis Wohlfarth, they built Accointing.com because they needed to track all the investments they had made over the past years. They started in crypto in 2014 and went through the ICO bubble and all the different movements until now.
At the end of 2017 or the beginning of 2018, they decided to build a tool to track the different trades of the different investments. That started to become bigger and bigger because they had friends that also needed the tool.
They built different solutions for different countries because the co-founding team was from different countries. The team needed a specific solution for each country's different regulations and calculation methods.
In building Accointing, soon they needed a bigger team and so they hired a few of their first developers. They built up the team, and it snowballed. They then built Accointing as a platform.
When you first sign up with Accointing, you will find an empty dashboard to connect your different wallets and exchanges.
From there, you can choose whatever you want to connect. If you have a Coinbase wallet, search for Coinbase, click on a live connection, and connect it automatically.
Accointing only has read access, so there's no need to worry about security issues. They read the historical trades, import everything automatically to Accointing, and update it on the go. Each time you log in or click on a hard refresh, they input the newest data and collect all the different trade data you did since the last time you logged in.
It works the same way with Ethereum or the different hardware wallets. You can connect the Bitcoin addresses that you have to Ethereum, DeFi trades, etc. Just import with the wallet address, and they import it automatically.
Once you have done that, you will find an overview of the different wallets and exchanges you own. You can connect the same account to your mobile phone.
They have a fully functional mobile app to keep track of and update everything. You can even connect wallets and more exchanges through the mobile app on the go or add manual transactions if you want to.
You will then find an overview of your total account value, the different assets you hold with an average buy price, profit loss, historical performance, different portfolio locations, and where you hold your coins. You will also find a nice feature for the U.S. we they dive deeper into where you can optimize based on the holding period. You can then report everything and create the tax reports and all these different outputs.
The cool thing about Accointing is that they decided to offer the entire platform for free. So you can just import your transactions. You can keep track of everything. You can use the mobile app, and you only pay once you need a tax report.
They decided to do that because we wanted everyone to keep track of everything during the entire year. If you do that afterward and trade for a few years and then realize you need to do your tax report, it's going to be a mess because you did so much activity, had so many wallets, different exchanges, and maybe your exchanges went down.
You always want to keep track of everything. When you want to report, you have everything in one click at the end of the tax year. That's why we partnered up with Clinton Donnelly of CryptoTaxAudit.com because he is an expert in crypto taxation for the US, and his team provides expert services.
Accointing needed a local partner in the U.S. to help them with the different classification methods, the different tax regulations, and the new regulations.
I enjoy working with Accointing.com. We have a great partnership, and I think it is an excellent product. I've worked with many of the platforms out there. There are several very good ones, but I consider Accointing to be at the top.
My team at CryptoTaxAudit has been doing crypto tax returns since 2018; we've done thousands of them. At this point, we are the number one specialty firm, taking care of defending cryptocurrency traders that the IRS is auditing.
Even now, I have 17 clients being audited on their crypto returns. This has given us a fascinating perspective because I can see how the IRS attacks cryptocurrency returns. As a result, we've improved and changed how we prepare a crypto tax return. We call this our Bulletproof Tax Return Methodology. The idea is that we can prepare a return that is less likely for the IRS to attack.
Most of my clients are large traders and whales, and we have a real passion for everyone involved in cryptocurrency trading. Crypto traders need tools because there's so little guidance.
I created CryptoTaxAudit with some fantastic products that you can't get anywhere else. The first one is we have a newly announced DIY masterclass that you can take, which shows you how to do your Bulletproof Tax Return. This return methodology can significantly reduce your chances of being audited and give you a better tax return than you would get with TurboTax, Taxact, H&R Block, or even your friendly local accountant's office.
We also have a revolutionary new service that no one else is offering. We're using breakthrough technology to check your IRS returns weekly. Furthermore, we can see when the IRS supercomputers have flagged your returns for an audit. If they put this flag on there, we notify our membership clients right away.
Typically, there are six months between when a flag is set in and when an IRS auditor starts the audit. That's enough time for us to look at your return to figure out what's wrong. We can fix it, refile it, and you can avoid the 20 to 40% accuracy penalty plus significant interest that the auditor would hit you with. This is revolutionary.
Finally, people have a tool that puts them in defensive positions, like having early radar. In times of warfare, you want radar. You want to know when the enemy is coming in. Otherwise, you are waiting for the IRS to blindside you via mail. So, this is fantastic stuff.
We're excited about bringing tools and technology to help the average trader in the United States. And we chose to work with Accointing because they can help generate a quality tax return with accurate results that work together with all of this new technology.
Learn more about our Audit Defense membership, which alerts you to potential audits, provides a monthly IRS summary report, and offers representation and defense benefits in the event of an audit.
Dennis Wohlfarth is the CEO of Accointing by Glassnode. Clinton Donnelly is the CEO of CryptoTaxAudit.
DISCLAIMER: Opinions and perspectives of the author, host, and guests. It should not be construed as U.S. taxpayer advice. There are often multiple interpretations of tax law. Various strategies may be suited to specific individuals and for particular situations. Seek out professional tax, legal, or financial advice from CryptoTaxAudit or from other reputable companies.
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