What to Do on Tax Day (and after)!
2 Jun, 2024 · 21 min read
Tax day in the US is on Monday, April 15th this year, with taxpayers having to pay their crypto taxes that day.
For investors who cannot properly report their crypto taxes by tax day, they could ask for an extension, but the reporting requirements remain the same. Do you know what to do to report your crypto taxes?
In this article, we’ll give you a refresher on how to report your crypto taxes, what documents you need to report crypto, what to do on tax day, how to ask for a crypto extension, and much more!
What Does Tax Day Mean in the USA?
Tax day in the US is when individual taxpayers should file and pay their taxes. In 2024, tax day falls on April 15th. On Monday, you have to file your taxes in general, including your crypto activities.
What is the Deadline for Paying US Taxes?
In 2024, the deadline to file and pay your crypto and individual federal taxes is April 15. Learn the key dates of the crypto tax season. season.
When are Taxes Due in 2025?
In 2025, tax day falls on April 15, with the ability to ask for an extension by that date for more time to submit taxes.
Can You File Taxes Late in USA?
Yes, if you’re not ready to file your crypto taxes on tax day (April 15), you can file for an extension, which will delay the filing obligation for six months.
What to Do on Tax Day?
You can file your Individual US Income Tax return to the IRS in late January, with the final date being April 15. On that day, you must file and pay your US taxes or ask for a 6-months extension.
What do I need to report regarding crypto on tax day?
There are several obligations regarding reporting crypto taxes, including:
- Answering the crypto question on Form 1040;
- Reporting all of your gains/losses from crypto trading activities during the tax year (including crypto-to-crypto trades, crypto-to-NFT trades, and NFT trades);
- Reporting all the income you had from crypto activities, such as airdrops, hard forks, salaries paid in crypto, crypto interest, crypto staking rewards, and others.
What Happens if You Miss the Tax Day Deadline?
If you miss the tax day, you should file a late return as soon as possible to avoid not receiving a refund (if you’re entitled to a refund that tax year). However, if you do not pay your crypto taxes by tax day, you can have fines and interest on the amount to be paid.
How Do You File for a Tax Extension?
If you do not have your crypto taxes ready by tax day, you can file for an extension and have until October 15 to submit them (not pay them).
You can ask for an extension using tax software, the IRS free tax software, or by mail.
How to report crypto taxes?
If you had gains/losses from crypto trading, you’d have to report them on Schedule C of your Form 8949 and Schedule D of your Form 1040.
If you had any crypto income from activities like the ones listed above, you’d need to include them in your US Individual Income Tax return.
How to Reduce Crypto Taxes by Tax Day?
To reduce crypto taxes by tax day, you need to take some actions before the end of the fiscal year. Here are the top ways to reduce your crypto taxes by tax day:
Long-Term Holding of Your Digital Assets
By the end of 2024, investors could sell their digital assets if they held them for over 12 months to get a reduced tax rate. If that’s the case, in 2025, they’ll pay less capital gains taxes on the profits from those trades. Many countries offer tax advantages for long-term holders.
Crypto Tax-Loss Harvesting
By the end of the year, investors could sell some of their holdings at a loss to reduce the gains they have from other trades in a process called crypto tax loss harvesting. This is one of the best ways to save on your capital gains taxes.
Invest in Crypto Through Retirement Accounts
Investors buying crypto through retirement accounts like IRAs and Roth IRAs can enjoy tax benefits while investing or at the moment they sell their holdings. Discover more about investing in Bitcoin through IRAs.
Use a Crypto Tax Software
The best way to know the strategies where you can save on crypto taxes is to track your portfolio with crypto tax software. For example, CoinTracking shows you which coins are eligible for a long-term capital gains tax rate based on their holding period, enabling you to save on taxes.
How to Easily Calculate Taxes by Tax Day
The easiest way to calculate taxes by tax day is to track your crypto trades frequently during the fiscal year and have enough time to determine all your gains/losses and income.
After determining those every month or every week, you’ll be able to optimize your strategies to save on taxes and find fewer errors when generating tax reports to file your crypto taxes.
Tips for reporting your crypto taxes
The best tips to have a smooth tax season are to accurately and frequently track your crypto activities (monthly) and work with top crypto tax software or crypto tax professionals.
With a leading crypto tax software, you can import your trades, discover your gains/losses, and generate the necessary tax reports.
How to File Your Crypto Taxes
Investors can file their crypto taxes by paper or electronically, with the process being much faster with the latter option.
Taxpayers can use tax software like TurboTax (or similar filing service), the IRS free filing system under pilot (Direct File), through official accountants, or by paper submission.
How to Avoid Mistakes in Your Crypto Taxes?
The best way to avoid mistakes is to track your gains/losses and income throughout the year to file all the necessary tax forms with enough time.
Please double-check all the information on official forms, from name to social security number, beside the most important information regarding income (including from crypto activities).
What to Do on Tax Day in Other Countries
Canada
Tax day in Canada falls on April 30, 2024, with people having to submit their tax return by that date, including those who deal with cryptocurrencies (in the right tax forms). Discover how to report your crypto taxes in Canada.
Australia
In Australia, investors have to report their taxes, including crypto taxes, by Thursday, October 31, 2024, according to the Australian Taxation Office (ATO). Here’s how to do your crypto taxes in Australia.
UK
The UK follows a slightly different tax calendar than other countries on this list, with their tax deadline for crypto investors falling on January 31, 2024, and January 31, 2025. Discover the requirements to report taxes on our crypto tax UK guide.
Germany
Germany is one of the most crypto-friendly countries, but investors still have to track their gains/losses and income and report their crypto taxes by Wednesday, October 2, 2024. Discover how to do your crypto taxes in Germany.
Frequently Asked Questions
about what to do on tax day
Conclusion
Despite differences in local tax laws, crypto investors across countries, from the US to the UK and Germany, need to track their crypto. Investors need to determine their gains/losses and income and generate tax reports with their information to submit their crypto taxes.
Tax day in the US, when investors have to submit their returns, falls on April 15, but if investors filed for an extension, they can submit their returns by October 15.
CoinTracking is the perfect tool for investors across countries, including the US, to import all of their trades and get the right tax forms to file crypto taxes by tax day.
Disclaimer: All the information provided above is for informational purposes only and should not be considered as professional investment, legal, or tax advice. You should conduct your own research or consult with a professional financial advisor when investing.
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