15 Mar, 2022, 09:34 ET
Non-Tax Paying Survey Respondents Cite 'Confusion'—Not Intentional Tax Evasion—as Main Reason
AUSTIN, Texas, March 15, 2022 /PRNewswire/ -- With Tax Day 2022 a little more than a month away, CoinLedger (rebranding from CryptoTrader.Tax), a leading tax-reporting platform geared toward assisting cryptocurrency, DeFi, NFT, and Web3 users with simple tax reporting solutions, today released its 2022 "State of Crypto Tax Reporting" survey, conducted in partnership with YouGov. Seeking to understand better the current issues involving cryptocurrency taxes in the U.S., the survey asked investors, among other things, whether they currently report and pay taxes on crypto and, if not, what the most common reasons for not doing so are.
When it Comes to Reporting and Paying Crypto Taxes – It's Complicated.
According to CoinLedger's 2022 'State of Crypto Tax Reporting' Survey, American crypto investors seem to be as confused as ever when it comes to reporting taxes. More than 1,000 U.S. investors over the age of 18, who own or invest in cryptocurrency, sent the clear message that they want to pay taxes, but either 'didn't know that crypto was taxable' (25 percent) or 'didn't know how to report crypto on their tax returns' (20 percent). And, contrary to popular belief that crypto investors are looking to avoid paying taxes, a majority (50 percent) reported paying taxes on crypto. In comparison, only a small group of respondents (15 percent) claimed to intentionally avoid paying taxes, stating reasons such as 'the government doesn't know about my cryptocurrency' or 'I do not want to pay taxes.'
Survey respondents also cited 'not having the software tools to properly account for their crypto transactions (20 percent) as the reason for not reporting crypto on their taxes, while almost 30 percent reported simply 'having trouble keeping track of their capital gains and losses.' Age is also likely a factor while not explicitly addressed in the CoinLedger survey. As reported in previous studies, cryptocurrency is most popular with a younger demographic, making them relatively new to investing and likely not as savvy regarding tax reporting obligations.
"Multiple factors continue to greatly impact investors' ability to track and report taxes on their digital assets accurately," said David Kemmerer, CEO, and Co-Founder of CoinLedger. "While 'confusion' is not a valid reason for avoiding paying your taxes, it has become a reality for digital asset investors. New tax laws going into effect coupled with a growing number of U.S. states and international charities looking to or already accepting digital asset payments only makes the need for simple, user-friendly crypto tax and accounting software, specifically for DeFi users, more critical."
Americans Lack Confidence in Policy Makers' Understanding of Industry.
While it's nothing new for Americans to lack confidence in their elected officials, the CoinLedger/YouGov survey revealed that more than two-thirds (70 percent) of crypto investors do not believe the politicians and regulators drafting cryptocurrency laws understand the industry as a whole.
"There continues to be an urgent need for regulators to enact fair and effective crypto tax policy, not only in the U.S. but globally," added Kemmerer. "Our survey revealed the number of crypto investors who are reporting it on their taxes has increased since 2018. Still, the industry has a long way to go from a regulatory perspective, especially when it comes to narrowing the gap between law-abiding crypto investors and those who are avoiding them due to lack of understanding, overall confusion or otherwise."
To better understand the current issues involving cryptocurrency taxes in the U.S., CoinLedger partnered with YouGov to survey more than 1,000 U.S.-based adults (18+) who invest in cryptocurrency. The survey was conducted from November 22 – December 4, 2021. For more information and to see the full results, go here https://cryptotrader.tax/annual-crypto-tax-report.
CoinLedger (rebranding from CryptoTrader.Tax) enables seamless portfolio tracking and tax reporting for participants of the digital asset economy. Founded in 2018, CoinLedger was built to reduce the friction of participating in the cryptocurrency ecosystem by making tax reporting
as simple as possible. By directly integrating with major exchanges, wallets, blockchains, and NFT platforms, CoinLedger provides a unified dashboard for users to track and monitor their cryptocurrency activity. Whether you're trading cryptocurrencies, buying and selling NFTs, or staking on DeFi protocols, CoinLedger makes tracking your portfolio and reporting your taxes more straightforward than ever. For more information, visit https://cryptotrader.tax/world-meet-coinledger.
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