Wirex Tax Guide

Is Wirex a crypto wallet?

Wirex is a leading crypto application, wallet, exchange, and card, enabling customers to trade, store, spend, send, and earn cryptocurrencies worldwide.

Since 2014, Wirex has attracted 5 million users and executed over 20 billion crypto transactions, enabling users to trade 250 digital assets.

Do you pay taxes trading on Wirex?

Yes, when you trade cryptocurrencies on the Wirex exchange, you’d have a taxable event in the US, subject to capital gains taxes.

If you buy and sell any crypto on Wirex, you’d have to determine the capital gains/losses and report them on the right crypto tax forms.

Remember that trading any cryptocurrency for another cryptocurrency or FIAT (e.g., USD) is a taxable event in the US and each trade needs to be reported according to its holding period (long-term versus short-term).

Do you get taxed for sending crypto?

When you send crypto from a Wirex wallet to another crypto wallet (belonging to you), you don’t need to pay taxes over those transfers.

Holding and sending cryptocurrencies on personal wallets are not taxable events in the US, but if you sell any of your holdings, you’d have to pay taxes over the gains in those transactions.

Discover more about the potential for taxes when transferring crypto between wallets.

Do you pay taxes for spending crypto with the Wirex card?

Yes, if you spend any crypto with a card like the Wirex to purchase a product or service, you’d have to pay taxes over that transaction.

Any crypto spent for a product or service, whether with a crypto card or not, is a taxable event in the US.

Let’s cover how that transaction is taxed.

Let’s imagine that John bought 1 Bitcoin (BTC) for $20K in October 2020.

He decided to buy a pair of jeans for $100 in January 2021. On that date, 1 Bitcoin is valued at $30K. So, he has to sell 0.00333 ($100/$30K) worth of Bitcoin. That same amount of Bitcoin in October 2020 was worth $66.67. The capital gain on this transaction is the difference of $33.33 ($100 – $66.67).

John will have to pay capital gains taxes over that amount. In this case, he would be taxed at short-term capital gains taxes because he sold his Bitcoin before holding it for 12 months instead of a long-term tax rate. The crypto tax rate will be between 10% and 37% depending on other factors.

In conclusion, spending crypto is treated as a two-step transaction for tax purposes, being (1) selling crypto for FIAT at FMV at the time of the transaction, and (2) using the FIAT to buy a product or service. The deemed sale of crypto for FIAT is a taxable event, gain/loss will need to be calculated based on the difference between the FMV and the taxpayer’s cost basis in that crypto.

Do you get taxed when earning crypto?

Earning crypto interest or staking rewards are taxable events in the US, subject to income taxes.

On Wirex, you can earn rewards from spending your crypto with their card and receive crypto interest from their X-Accounts product.

You’d need to determine the Fair Market Value (in USD) of each batch of interest you received at that time and report it in your US Individual Income Tax Return (Form 1040).

However, receiving rewards due to the use of a crypto card for purchases is not a taxable event. It’s the same as getting a cash rebate from using a traditional credit card. The rebate is not taxable. You still need to calculate the amount of crypto card rewards received if it’s in crypto, in USD based on the FMV at the time of your receipt, as that will become your cost basis in the crypto you received as reward.

How to track Wirex trades?

You can track your transactions from Wirex, from trading to spending and earning, by importing them into a crypto tax software like CoinTracking, and then you can determine the gains/losses and generate tax reports.

Here’s how to export your Wirex transactions and import them into CoinTracking:

• Go to your Wirex account;
• Navigate to Accounts Digital;
• Select your preferred account and Statements;
• Choose a statement period;
• Select CSV format;
• Click on Export;
• Upload your CSV file to the Wirex importer page on CoinTracking.

How to report Wirex taxes?

If you trade cryptocurrencies on Wirex, you’d need to report the capital gains/losses on each transaction, separated by long-term and short-term trades, on Form 8949 and Schedule D of Form 1040.

If you earn any crypto interest and staking rewards from Wirex, you’d need to determine the Fair Market Value of the interest/rewards you received and report them in your Form 1040. You don’t need to report the crypto card reward you received due to using the card for purchases though.

Learn more about how to report your crypto taxes.

The best Wirex crypto tax tool

The best Wirex crypto tax software in the market is CoinTracking.

With CoinTracking, you can import your Wirex transactions, determine your gains/losses, generate crypto tax forms, and more:

• Import crypto trades from 110+ available exchanges
• Analyze your portfolio with 20+ advanced reporting features, including showing you eligible coins for a tax-free rate
• Support for 10+ accounting methods (e.g., FIFO, LIFO, HMRC, ACB)
• Generate crypto tax reports

Wirex taxes done for you with Full-Service

CoinTracking also offers a Full Service for US crypto investors. A crypto reconciliation tax expert from Polygon Advisory Group, a leading US crypto tax firm, will review your CoinTracking account, help fix any errors, and ensure you submit your crypto tax reports error-free.