Got crypto? Make sure it’s reported on your 1040

The cryptocurrency world is changing rapidly and its popularity is soaring. In late 2021, the crypto market hit $2.9 trillion – and the IRS is trying to keep up. Those who invest in virtual currency need to be aware the IRS requires individuals to report income and capital gains from cryptocurrency on their 1040 tax form.

In 2020, the agency moved the question about virtual currency to a more prominent position on page 1 of the individual tax form in hopes of reducing any confusion on reporting of virtual currency.  The question reads as follows: “At any time during 2021, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?”

The IRS is placing a priority on making sure cryptocurrency exchanges are tracked. It is leveraging data analytics technology and artificial intelligence to sift through billions of transactions in the digital world to assist their investigators in identifying tax evasion with virtual currencies.

Currently no cryptocurrency exchanges are required to report digital asset activity to their investors, but this is set to change as a result of the passage of the Infrastructure Investment and Jobs Act (IIJA) last year.

The new reporting requirements for cryptocurrency exchanges will take effect January 1, 2023, and will affect tax returns filed in 2024.  Listed below is a snapshot of the cryptocurrency reporting provisions in the IIJA:

  1. It expands the definition of brokers who must provide 1099-B. Cryptocurrency exchanges (Coinbase, eToro, Pionex, Robinhood, etc.) are now considered brokers like traditional brokers.
  2. It expands the definition of digital assets as any digital representation of value which is recorded on cryptographically secured distributed ledger or any similar technology as specified by the Secretary.
  3. Digital assets are treated like securities, similar to stocks, bonds, and certain types of commodities in terms of capital gains/losses.
  4. The following information is now required to be reported to the IRS and to customers: (1) name, address, and phone number of each customer; (2) the gross proceeds from any sale of digital assets; and (3) capital gains or losses and whether such capital gains or losses were short-term (held for one year or less) or long-term (held for more than one year). We assume they will send a 1099-B like other brokers.  The legislation does not specify which IRS forms these exchanges will be required to send out to customers.
  5. The penalty for failure to furnish correct payee statements is $250 per customer, up to a maximum $3 million penalty.
  6. A digital asset with a value of $10,000 or more is now classified as “cash.” Any person engaging in a trade or business that receives more than $10,000 in cash (digital assets) must file IRS Form 8300 (“Report of Cash Payments Over $10,000 Received in a Trade or Business”).

If you hold digital assets, or plan on acquiring them before the end of 2022, you should expect the exchange to collect a Form W-9 from you seeking your taxpayer identification information.

Please let us know how we can advise you on this or any other tax matter.

Kristin Ward is a Partner with Antares Group. She can be reached at kward@antarescpas.com.

Recent Articles:

Follow Antares CPAs:

Thank you for registering!

You will receive an email confirmation soon, and we look forward to seeing you at the Antares Wealth Symposium.

Make your room reservation now.

Use the link below to get a special room rate at the gorgeous Hotel Contessa where our symposium is being held.

Save my place!

Complete this short form to reserve your place at the free Antares Wealth Symposium. Watch for your confirmation email and we look forward to seeing you in San Antonio.

Contact Info
Guest Info

To help with meal planning, please indicate how many from your group will be attending each event.

Monday Dinner

Tuesday Breakfast

Tuesday Lunch

Dietary Restrictions
Other Accommodations
Contact Info
Guest Info

To help with meal planning, please indicate how many from your group will be attending each event.

Monday Dinner

Tuesday Breakfast

Tuesday Lunch

Dietary Restrictions
Other Accommodations

Succession & Transition Strategies

Creating a successful succession plan is about protecting the future of a business and/or brand and ensuring there is a strategy in place to ensure your business continues to thrive.

After years of investing time, money and other resources, it’s imperative to prepare for this next stage in business and life. Poor planning can increase risks for stakeholders and tarnish legacies. Let’s make sure the next generation is well-equipped and ready to take your life’s work and family legacy to an even greater level of success.

Each situation is unique because the needs of each one involved are unique. We carefully review each opportunity to determine how best to structure a transition while meeting your goals, complying with any brand licensing polices and minimizing the tax implications of the transfer.

  • Next generation succession planning
  • Retirement planning
  • Wealth management

Let's get started.

Call us at 770.785.7855 Or email hello@antaresgroupcpas.com

Technology Services

Antares Group’s technology team provides convenient hardware and software support, along with comprehensive cloud accounting services with 24/7 access to up-to-date financial information exactly the way you want it, on any connected device, with a customizable dashboard interface. We use best-in class cloud accounting platforms and software including Sage Intacct, Bill.com and robot process automation (RPA) with integration capabilities with some of the leading point-of-sale, payroll, and business operations management software programs.

Cloud accounting is just the beginning; Antares Group’s experienced technology team also performs system evaluations and makes recommendations for products and services that will help your business run more efficiently, as well as protecting your information and infrastructure with robust security options. Using the right technology for automation will simplify your life and keep your valuable data safe..

  • Technology and security optimization
  • Complete cloud accounting services
  • Computer troubleshooting assistance with remote and onsite repair

Let's get started.

Call us at 770.785.7855 Or email hello@antaresgroupcpas.com

Business Planning & Valuation

An accurate understanding of your company’s current value and financial viability is vital for achieving business success and the launch pad to boundless possibilities in the years to come. Realistic valuations are essential for long-term strategic plans, business successions and expansions, gift and estate planning, and a lucrative retirement package. Planning for where you want to go in the future is what our business and tax advisors do best. Whatever your goals, we are here to provide you with the right plan and insightful guidance to achieve it.

  • Trend reporting and analysis and business valuation
  • General business and start-up consulting
  • Major reinvestment planning
  • Cash flow projections

Let's get started.

Call us at 770.785.7855 Or email hello@antaresgroupcpas.com

Back Office Solutions

In such a fast-moving business environment, business owners need every advantage to succeed. Improving efficiency should be an ongoing part of your strategy for financial success, empowering you to make continuous improvements.

Whether your business is a single location seeking to grow effectively and sustainably, an established franchise brand adding new locations, or something in between, Antares Group provides a suite of back office services and the financial expertise to help business owners and managers achieve their operational and financial goals. In the process of supporting your essential back office operations with practical solutions, we analyze the function and effectiveness, looking for inefficiencies and potential liabilities, offering valuable insights for owners and managers.

  • Daily deposit verification and online banking monitoring
  • Process invoices and code general ledger accounts
  • Process vendor payments and file 1099s
  • Prepare and file sales and use tax returns
  • Reconcile bank, credit card and cashless sales accounts

Let's get started.

Call us at 770.785.7855 Or email hello@antaresgroupcpas.com

Tax Advisory

Minimizing your tax burden is a year-round strategy; planning for and preparing complex business and individual tax returns is where Antares Group excels. Beyond simply helping you fulfill basic tax obligations, you can rely on our tax advisory team to keep you informed of ever-changing regulations and keep you in compliance. We conduct regular reviews to make sure all methods of reducing your tax liabilities are being used. We routinely assess your personal income tax situation and cash flow to guard against the unexpected. This ongoing strategic analysis empowers you to maximize tax savings and capitalize on new opportunities.

In addition, we provide advisory services for new business startups, acquisitions, and dispositions. Through careful analysis, we help clients determine the best structure and make the process as seamless as possible.

  • Business and individual year-end tax returns
  • Personal property, gift, and trust income tax returns
  • Fixed asset setup and maintenance
  • Annual tax planning and preparation

Let's get started.

Call us at 770.785.7855 Or email hello@antaresgroupcpas.com

Cloud Accounting

Whether you run a small closely held business or a large franchise operation, maintaining a firm grasp of accounting and bookkeeping can be challenging. Between managing staff and overseeing daily operations, there is not enough time to dig into the books and make sense of the financials. You need to know the facts and the implications. – having precise, up-to-date information at hand means you always know your financial position so you can make informed decisions that keep your business moving forward.

The financial experts at Antares can create a custom menu of accounting and tax services perfectly catered to your business needs, including accurate and timely financial statements and reports, so you are always prepared to respond quickly to changing and challenging circumstances. Along the way, we provide clear feedback and financial guidance to help you predict trends and recognize issues, then make the necessary adjustments to sustain cash flow throughout the year.

  • Timely preparation of financial statements based on your particular needs
  • Complete preparation of sales, payroll, inventory, accrual, and prepaid journal entries
  • Meticulous monthly bank and credit card reconciliations

Let's get started.

Call us at 770.785.7855 Or email hello@antaresgroupcpas.com