Crypto Investments: A Good Alternative this Taxing Season
If you’re feeling overwhelmed by the complexities of taxation in the US, you’re not alone. This year, the difficulties may be even greater as Congress has failed to provide an update on the pending tax plan, making filing season more challenging. Small business owners are expected to bear the brunt of this strain.
The Tax Relief for American Families and Workers Act of 2024 includes three business deductions that could impact 33 million small businesses. While the bill received strong support in the House, it is currently at a standstill in the Senate. Without clear direction, its passage is far from guaranteed.
Surge in Crypto Investment
Despite the usual aversion to uncertainty in crypto markets, the desire to protect assets and pay less in taxes may lead to an increase in crypto investment. The cumbersome tax filing process could prompt small businesses to allocate a portion of their assets to the digital world, potentially reducing their tax burden.
Crypto Tax Rules in the US
According to Coinbase, each cryptocurrency transaction has specific tax implications in the US. American taxpayers are required to disclose all sales, conversions, payments, and income related to cryptocurrency to the IRS and state tax authorities if applicable. Losses can be claimed up to $3,000 per year to offset other income. Any remaining losses can be carried forward to future years until fully utilized.
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