CoinLedger’s recently released State of Crypto Tax Reporting Survey revealed that there is some confusion among cryptocurrency investors when it comes to reporting taxes.
The survey polled more than 1,000 U.S. crypto investors and found that 25 percent didn’t know that crypto was taxable, while 20 percent didn’t know how to report crypto on their tax returns. Further, it found that 50 percent reported paying taxes on crypto while only 15 percent claimed to intentionally avoid paying taxes.
Further, it found that about 20 percent said they did not have the right software tools to properly account for their crypto transactions, while almost 30 percent reported having trouble keeping track of their capital gains and losses.
“Multiple factors continue to greatly impact investors’ ability to track and report taxes on their digital assets accurately,” David Kemmerer, CEO and co-founder of CoinLedger, said. “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.”
CoinLedger, formerly known as Crypto Trader.Tax, is a leading tax-reporting platform geared toward assisting cryptocurrency, DeFi, NFT, and Web3 users with simple tax reporting solutions. The survey was conducted in partnership with YouGov.
Among other findings, the CoinLedger/YouGov survey revealed that 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,” Kemmerer added. “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.”
The survey was conducted from Nov. 22 through Dec. 4, 2021.