How to File Cryptocurrency Taxes with TurboTax (Step-by-step)
Cryptocurrency
transactions can be complex and confusing, especially when it comes to filing
taxes. That’s why more and more people are turning to TurboTax to help them
navigate the cryptocurrency tax filing process. With TurboTax’s easy-to-use
software and guidance, you can quickly and easily file your cryptocurrency
taxes without any headache. Plus, you'll have the peace of mind of knowing that
all of your tax return information is safe and secure.
So let us get
started with the process.
Crypto
Taxes with TurboTax
TurboTax is one of
the most popular tax filing platforms, although it was not specifically built
keeping Cryptos in mind. That’s why filing cryptocurrency taxes with TurboTax
doesn't look as intuitive as it should. The experience sometimes feels tedious
and confusing due to lacking cryptos-specific integrations and functionalities.
To make the process
easier for you, TurboTax has recently partnered with CoinLedger. This makes
aggregating and calculating crypto transactions across various wallets
convenient.
Importing
Crypto Gains and Losses into TurboTax
We have divided the
import process into various steps, thus making the process more readable and
digestible. Before moving ahead, make sure you have your TurboTax product
bought and ready.
1.
Navigating through the TurboTax
website
First,
head over to TurboTax’s website and login into your account. In case you don’t
have a premium package, buy one. You won’t be able to move further with a free
account. A Deluxe account won’t work either you need a premier or self-employed
one.
2.
Moving ahead with questions
If
case you sign-up for the first time, you will be bombarded with a number of
questions. Answer them diligently and move ahead.
3.
Choose the right option: “I Sold
Stock, Crypto, or Other Investments.”
4.
Find the Cryptocurrency Section
In
the “Wages & Income” tab, after clicking on the “Federal” tab, you can find
the Cryptocurrency section.
5.
Enter your Cryptocurrency data
You
can enter your crypto data in the Wages and Income tab by clicking on the
Edit/Add button.
You
will then see a prompt asking you about your investment income. Click “yes” to
it.
Then
click the “Enter a different way” button.
6.
Select your investment type
Now
you will find yourself on the investment selection page. Select
“Cryptocurrency” and continue. After doing that, select upload it from the
computer”
7.
Select “CoinLedger” as the crypto
service
When
you are asked to select your crypto service provider name, you know what to do.
Select “CoinLedger.”
8.
Importing the CoinLedger’s
TurboTax online CSV file
Head
over to your CoinLedger’s tax report Dashboard and download the “TurboTax
Online” file. And then import it into TurboTax. This CSV file reflects all of
the gains and losses you made across all the platforms from various trading
activities.
9.
Reviewing and Finalizing
After
you successfully import, you will see a preview window. Here, you need to
review all of your data. This data contains all of your transactions across
various platforms. You need to select the taxable ones carefully.
And you should be
good to go. You should now see a comprehensive record of your crypto
transactions, whether they be losses or gains.
Reporting
Crypto income other than capital gains/losses
The above process
lets you report income that is of a capital nature. In case you have a crypto
income of another nature, you can report them by following the process below.
Unfortunately,
TurboTax does not support an ability to report Staking and Mining income
natively. However, it can still be reported following the process below.
- Inside your TurboTax, head over to the “Federal” tab.
- Scroll down, and you should see a row named “Less common income”,
click on the show more button.
- Now find the “Miscellaneous Income” by scrolling down and clicking
the “start” button.
- In the last section, find “Other reportable Income” and click
start.
- Now enter all the details and enjoy.
We hope you learned
something new and were able to do what you were trying to do, i.e., you were
able to file cryptocurrency taxes with Turbo Tax.
Frequently
Asked Questions (FAQs)
- Does the TurboTax platform calculate cryptocurrency gains?
Yes,
TurboTax helps, and you can manually calculate crypto gains with it, but it is
not as sophisticated as a native cryptocurrency tax calculator.
- How can I report crypto on my taxes?
You
can report your crypto gains and losses on form 8949. On the other hand, crypto
income can be reported on Schedule 1 or Schedule B/C.
- Where do staking and mining income go?
Staking
and mining incomes go under the “Miscellaneous Income” tab.
- How to format my crypto transaction as a CSV file for TurboTax?
The
file downloaded by CoinLedger is already a CSV file, and it is good in itself.
You don’t need an additional CSV file for your TurboTax.
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