GOP tax cuts aren't showing up yet in most paychecks

Accountant temporarily trades financial focus for NHL saves

Tax deductions even if you don't itemize for 2017 and 2018

Have Your Clients Done a “Paycheck Checkup”?

The IRS has been pushing taxpayers to perform a “paycheck checkup” this week to ensure the correct amount of tax is being taken out. Having too much taken out of your paycheck could mean giving too much of your money to the government to “hold” while having too little taken out could mean owing money come tax time. Our sister company, Peoples Tax, encourages clients check their withholdings every year in the event that something has changed that would require an adjustment.

As you know, changes to the tax law are coming – and that includes the withholding amounts for 2018. The Tax Cuts and Jobs Act (TCJA) increased the standard deduction, removed personal exemptions, increased the child tax credit, limiting or discontinuing certain deductions and changed the tax rates and brackets. Taxpayers who don’t perform a “paycheck checkup” could end up in financial trouble when filing tax year 2018 returns.

 

How to do a “Paycheck Checkup”

The IRS has a Withholding Calculator that gives employees the information they need to fill out a new Form W-4, Employee’s Withholding Allowance Certificate. Taxpayers should gather their most recent pay stub and check to make sure it reflects the amount of Federal income tax withheld so far in 2018 before using the withholding calculator. They should also have a completed copy of their 2017 (or possibly 2016) tax return handy.

Here are some tips for using the Withholding Calculator. Taxpayers should:

• Use their most recent pay stubs and federal income tax return to help estimate income and other items for 2018. Keep in mind the new tax law made significant changes to itemized deductions.
• Fill in all information that applies to their situations.
• Make estimates when necessary, but keep in mind the results are only as accurate as the information entered.
• Check the information links embedded in the program whenever taxpayers have questions.
• Print the final screen that summarizes their entries and the results. Use the results from the Withholding Calculator to determine if they should complete a new Form W-4, Employee’s Withholding Allowance Certificate.

The IRS has plenty of information to share with clients on performing a “Paycheck Checkup”.

For updated withholding tables, see IRS Notice 1036.

All this week, the IRS will be releasing information in their “Paycheck Checkup” series. The series will include:

• Tax reform tax tips
• Special news releases this week and in the weeks ahead
• YouTube videos
• Social media efforts about #PaycheckCheckup, including an IRS Thunderclap‎. ‎

As a tax professionals, we should be informing, educating, and encouraging clients on all things related to the new tax law. This is just one of many items that may affect your clients. You can help the IRS spread the word on social media about the importance of  a Paycheck Checkup by signing up for their Thunderclap here: http://thndr.me/7BvGKI.  A Thunderclap is a campaign where people “donate their social reach”. Once the campaign has reached its goal, the message will be posted on behalf of all who signed-up to support it.

source https://www.theincometaxschool.com/blog/have-your-clients-done-a-paycheck-checkup/

Tax-writing duo wants to remake the IRS. Again.

Got a refund? Owe the IRS? Time for a Paycheck Checkup!

Deadline for withdrawals from certain tax-deferred retirement plans is April 1. No fooling

Volunteer vacations provide help, possible tax deduction

A look at some tax provisions in the FY18 spending bill

Howard Stern is off the hook in phone tax privacy lawsuit

The Power of Connectors

Have you ever made a life-changing connection? An introduction to someone new can be a powerful force. New connections are made everyday, expanding personal networks and opening up doors to new opportunities.

You may not give much thought to the connections you make on a day-to-day basis, but these interactions are a great opportunity to help your tax business by taking on the role of a connector.

Why is being a connector so important?

Plain and simple, connectors are the builders of community. By introducing others, you’re establishing yourself as someone who cares about the needs of others, which people remember down the line. Supporting a community isn’t just about getting the word out about your tax business–many times it’s just the right thing to do.

Another great way to think about this is to remember the golden rule. When you are helpful to others, others are more likely to be helpful to you. Of course, there are no guarantees, and you shouldn’t become a connector solely because your business might be better for it. However, if you’re looking to meet new people, what better way to start than embrace the role of someone who makes connections?

You may not think of yourself as a connector, but the truth is that everyone can be one! In business, it’s not about what you know, but who you know. While The Income Tax School can teach you everything you need to know about starting a successful tax business, you still need clients in order to have a prosperous tax business. In other words, if you want to have a successful career as a tax preparer, you’re going to have to meet at least a few people along the way.

How becoming a connector can help you grow your tax business

Making connections for others can:

• • Demonstrate priceless value and credibility to both returning and prospective clients. Whether nationally or locally, you can’t put a dollar amount on helping others solve their problems. It’s a valuable trait that affirms others wanting to work with you.
    
  • Help you find new clients. There’s still a lot to be said about the power of a reliable recommendation. Connect others, and others will inevitably connect you. Plus, you never know who you might meet!
  • Improve your marketing skills and service offerings by gaining a better understanding of different client needs. Maybe you discover a local niche that’s not being served by other tax practices, or perhaps you find a new method of leveraging your services. You’ll never know if you don’t ask questions and figure out what others need.
  • Meet other connectors in your community. Connectors come in many forms. Being present affords you the opportunity to meet with connectors who are tapped in at many different levels, be it your neighborhood, city, region, or beyond.

How to Become a Connector

Here are some easy ways to become a better connector today:

• Ask others about the current challenges they’re facing, business or otherwise. Could you or someone you know be of help?
  
• Make introductions for those in your network with similar interests and needs. Never underestimate the power of putting in a good word for others!
  
• Bring your network together by hosting an event at your business. This can be a great way for you to strengthen your current relationships while helping your network forge new ones.
  
• Think strategically about who might be in need of a connection. Who are the players? How can their problems be solved in a mutually beneficial way?
• Express gratitude next time you’re introduced to a meaningful connection. Never underestimate the power of a sincere THANK YOU!

While not everyone enjoys taking on the role of being a connector, anyone can improve their ability to make connections in meaningful ways. Without the power of connections, The Income Tax School wouldn’t be able exist, let alone serve as a helpful resource for hundreds of up-and-coming professionals every year. What are your suggestions for those looking to improve their connection skills? Let us know in the replies!

source https://www.theincometaxschool.com/blog/the-power-of-connectors/

Turning in a tax pro who broke bad

Guest Post - California Cannabis Businesses Need to Prepare for Possibility of IRS Audit

False income, offshore shelters and frivolous tax arguments wrap up IRS' 2018 Dirty Dozen tax scams

Spring cleaning could help cut your tax bill as long as you properly value your donated goods

Taxpayers now can file for 4 renewed energy tax credits

SCOTUS' online sales tax ruling might not be the final word

QBI Deduction and Fiscal Years

The Tax Cuts and Jobs Act (P.L. 115-97; 12/22/17) added a new deduction for business owners (other than for C corporation owners). It is Code section 199A, Qualified business income. The deduction, in very simple terms, is equal to 20% of the individual's qualified business income, unless taxable income is lower than QBI.  If a single person has income over $157,500 or $315,000 if MFJ, then additional limitations come into play.  If the individual has income over these amounts and is in a specified service business, such as being an accountant, CPA or health care professional, they are limited but get no deduction if taxable income is more than $50,000 (or $100,000 if MFJ) above the thresholds. This provision is in effect for 2018 through 2025 and is intended to provide some rate relief because the corporate tax rate was lowered from 35% to 21%.

Section 199A is about 9 pages long in single-space and involves several definitions, limitations and special rules. One of the questions I heard from some practitioners is how it applies to income from, for example, a partnership that is using a fiscal year (rather than a calendar year). Since we don't have any administrative guidance, we need to do our best to see what the statute states and how the legislative committee reports might help in understanding the statute.

To that end, I summarized my interpretation in a short article in the AICPA Tax Adviser - "The Sec. 199A qualified business income deduction and fiscal years," 3/15/18. I hope you'll take a look, and leave a comment.

The AICPA Tax Section sent a letter to Treasury and IRS listing several areas in need of guidance.

What do you think?



source http://21stcenturytaxation.blogspot.com/2018/03/qbi-deduction-and-fiscal-years.html

Tax law change could imperial sports' box seats

IRS ending foreign account disclosure program in September

Influencer Marketing 101: How to Grow Your Tax Business

In 2018, you’d be hard-pressed to find someone who hasn’t used or heard of social media. Facebook is a driving force in the way brands do business. Instagram and Twitter are changing the way consumers discover new products. If you’re not actively devoting time to getting your message out on these channels, you’re missing out on a huge potential client base. After all, 81% of all Americans have at least one social media profile, with 68% of American adults on Facebook alone. But with such vast platforms, how can your message break through the noise?

Enter influencer marketing. Whether you’re looking to dip your toes in the social media pool for the first time or improve your long-term marketing efforts, influencer marketing is an essential tool. Influencer mentions go a lot farther than a tweet or post from a company account. Why is this?

Influencers are powerful because they meet consumers where they are. They provide a trusted voice to brands and products in a way that many businesses simply can’t. It’s important to recognize the distinction – the sooner you do, the sooner you can understand just how much of an impact influencer marketing can have on your tax business.

It’s also important to note that influencers aren’t just famous celebrities or people with massive online followings. Influencers are personalities who are actively engaged with their audience. Engagement is the mark of a true influencer, not follower counts or video views. For example, a product review YouTube channel with 1000 subscribers, or a mommy blogger with 100 followers could both help you gain new clients with the right message.

Working closely with influencers can afford you 3 great marketing opportunities:

1. Earning credibility with a new audience who might not have given you any attention or trust otherwise.
2. Gaining exposure to new potential clients who might not have heard about your business otherwise.
3. Generating quality content to help promote your business, which can be used again and again.

Reaching out to influencers directly to start building a relationship is one method, but the reality is that you’ll need to spend either time or money to establish a fruitful relationship for both parties. Because every business is unique – with a unique set of problems to solve – there’s no magic formula for influencer marketing. Patience is key.

It’s also important to reach out to influencers that can actually be of help to you, whether in your niche or community. In other words, sending a DM to Dwayne ‘The Rock’ Johnson on Instagram probably won’t magically transform your tax business overnight. To get started, try researching who’s active in your area. Reaching out to local/regional influencers is a great way to make an impact in the community while spreading the word about your tax business. For example, reaching out to an engaged freelancer or startup on Instagram could be a great way to spread the word that you specialize in taxes for freelancers and startups!

Here are four helpful ways to start building relationships with influencers:

– Ask for their perspective. What would they like to see in a tax business? Starting and maintaining a two-way dialogue is an excellent way to conduct market research (and get your business on their radar).

– Create an experience or product of value. This could be a quick informative video, infographic, tax prep resource, or an e-book, like CEO Chuck McCabe’s Guide to Start and Grow Your Successful Tax Business.

– Pay for a product review or placement. This tried and true method is the most direct means of influencer marketing. Many influencers are willing to negotiate prices, especially about products they believe in.

– Offer additional exposure to their content channels. Influencer marketing is a two-way street. Find unique ways to leverage your channels to drive traffic to an influencer’s, and you’ll lay the foundation for a fruitful relationship.

source https://www.theincometaxschool.com/blog/influencer-marketing-101-tax-business/

A Pi Day tasty tax tip on rounding tax form entries

Snowbound businesses get more time to file tax extensions

Fake charities, inflated refund schemes stay on IRS' 2018 Dirty Dozen tax scams list

DST and tax-deductible donations can help save wildlife

New tax law could discourage major league player trades

Blockchain and Accounting

Last week we talked about how the IRS views cryptocurrency, this week we’re talking about the platform cryptocurrency is built on: Blockchain. Why do tax preparers and accounting professionals need to know about Blockchain? Because the technology has the potential to change the industry all together. Here are some things you should know about Blockchain and its potential.

How Blockchain Works 

Cryptocurrency is just one application of blockchain technology. Blockchain is a chain of blocks that exist in a database. Each block contains a digital ledger of transactions (with time stamps) that have been hashed and encoded, and a cryptographic hash of the block that came before it. All of these blocks are linked to each other because they contain an encryption from the prior block. This creates a layer of security that prevents people from altering details about the transaction after it has occurred.

Increased Efficiency

Blockchain, at its core, is a transactional technology. It works essentially as a digital ledger to not only track transactions but to verify them. Within the technology, all transactions are tracked, verified, and secured. There is no question who the buyer and seller is or whether or not the payment was sent because it is time stamped and verified within blockchain – in real time. This leaves little room for confusion, errors, or tampering.

All of this means more data at your fingertips and in real time, which is good news for accounts payable and receivable, bookkeeping, and auditing.

Better Security

Blockchain is touted as being “un-hackable” because it is a transparent and shared database. Not only is each block within blockchain encrypted, each block also includes the cryptographic hash of the prior block in the chain. This essentially links all of the blocks together to create a chain of blocks. The encryption makes it so that if one transaction within one block is altered, it alters everything down the chain, making the altering traceable.

Not only is everything encrypted, it’s also maintained by an ecosystem of people. Everyone who is a member of the blockchain community has the data replicated on their computer, making it easy to verify transactions against another user’s data.

The verification and security capabilities means increased security when it comes to transactions, less incidents of fraud, and a reduction in dispute management and the need for reconciliation.

Reduced Cost

If Blockchain is more secure, efficient, reduces disputes, and reduces the need for long auditing processes, then ultimately, it reduces costs. Less time spent on these tasks means more time spent on value-adding activities and business development.

There is talk that the combination of Artificial Intelligence. and Blockchain will hurt our industry and replace accountants, bookkeepers and tax pros but I contend it will only make our industry better. As technology moves us forward we need to grow, adapt, and learn how to implement it into our practices in innovative ways. Otherwise, we will be left behind.

What are your thoughts on Blockchain? Leave a comment!

source https://www.theincometaxschool.com/blog/blockchain-accounting/

Retirement plan 2018 amounts unaffected by new tax laws

Lawmakers seek IRS property tax deduction clarification

IRS revises 2018 inflation changes to follow newly enacted Tax Cuts and Jobs Act provisions

Yes, you did read my 10-part 2018 tax year inflation adjustments series last year. Thank you. Then Congress and the prez went and changed the laws, meaning the adjustments had to be adjusted. Here are some of the key inflation changes just released by the Internal Revenue Service so that they are up-to-date with the Tax Cuts and Jobs Act's provisions.

The IRS just updated its previous 2018 tax year inflation adjustments based on changes in the new tax laws that took effect on Jan. 1.

Remember all that 2018 tax law related inflation data that the Internal Revenue Service announced last fall and I covered in a series of posts? Forget it. Well, much of it.

The Internal Revenue Service on Monday, March 5, released new inflation data for affected tax areas as they now stand under the so-called tax reform bill, the Tax Cuts and Jobs Act (TCJA), that took effect Jan. 1.

In addition to doing away with some items that, through 2017, were affected by inflation, the TCJA also changed the inflation measurement. It now is based on what is known as the chained consumer price index (CPI), which typically provides smaller bumps based on inflation.

Some of these new tax law and inflation amounts were updated in some of the aforementioned pre-TCJA inflation posts. However, I'm covering it again here, and in this lone consolidated post just to be done with it to get it out to all y'all readers of the ol' blog ASAP.

But before we dive into all these inflation figures again, one final tax year note.

All the amounts in this post are for the 2018 tax year. They do not apply to your 2017 tax returns that you are working on and must file by this coming April 17.

If you need any 2017 amounts for items discussed here, you can find them in my original inflation series posts where I included them for comparison purpose. The index of those posts is at the end of part 1; just search for 2017 in each post.

Now to 2018 inflation changes (again).

Income tax rates and earnings brackets: The new tax law keeps seven tax rates, which we've been using since 2013, and corresponding income brackets, so it really wasn't tax simplification or reform.

But it lowers some rates, especially at the top, going from 39.6 percent to a maximum 37 percent top tax rate.

The table below shows what tax rate you'll use to figure your 2018 income taxes when you file your return in 2019:

2018 tax rates and income brackets
USE THESE TAX RATES AND INCOME BRACKETS WHEN FILING YOUR 2018 TAX RETURN IN 2019.

Tax Rate	Single	Head of Household	Married Filing Jointly or Surviving Spouse	Married Filing Separately
10%	Up to $9,525	Up to $13,600	Up to $19,050	Up to $9,525
12%	$9,526 to $38,700	$13,601 to $51,800	$19,051 to $77,400	$9,526 to $38,700
22%	$38,701 to $82,500	$51,801 to $82,500	$77,401 to $165,000	$38,701 to $82,500
24%	$82,501 to $157,500	$82,501 to $157,500	$165,001 to $315,000	$82,501 to $157,500
32%	$157,501 to $200,000	$157,501 to $200,000	$315,001 to $400,000	$157,501 to $200,000
35%	$200,001 to $500,000	$200,001 to $500,000	$400,001 to $600,000	$200,001 to $300,000
37%	$500,001 or more	$500,001  or more	$600,001  or more	$300,001   or more

 

For estates and trusts, if taxable income is not more than $2,550 then the tax is 10 percent of the taxable income; between $2,551 and $9,150 then the tax is $255 plus 24 percent of the excess over $2,550; between $9,151 and $12,500 then the tax is $1,839 plus 35 percent of the excess over $9,150; and $12,501 or more then the tax is $3,011.50 plus 37 percent of the excess over $12,500.

Standard deduction amounts: Most taxpayers already use the standard deduction amounts when they file. The TCJA is likely to encourage even more of us to use these amounts, which you can find directly on your tax return, in the coming years.

The new tax law almost doubles the standard deduction amounts for each filing status. For 2018 (and they will be adjusted for inflation in coming years) they are:

• Single = $12,000
• Head of Household = $18,000
• Married Filing Jointly = $24,000
• Qualifying Widow/Widower (Surviving Spouse) = $24,000
• Married Filing Separately = $12,000

Before you get too excited about these larger standard deduction amounts, consider the reason why they were raised. They are larger because you cannot claim any personal or dependent exemptions in 2018 and through 2025 when this and other individual tax provisions expire unless renewed by a future Congress and president.

To pacify folks upset with the loss of exemptions, the new law enhances the child tax credit. It's doubled to $2,000, although the refundable portion is only increased. And to accommodate taxpayers with larger and older families, the TCJA also includes a new $500 credit for non-child dependents.

Itemized deduction limits, old and new: While the items here technically aren't affected by inflation, I'm including them in this post since the decision to use the standard amount or itemize are connected. You need to look at both deduction options to find and use the one that provides you the most tax savings.

Plus, the IRS' latest inflation announcement does cover some of these deduction considerations.

If you find filling out Schedule A is better for you than claiming the standard deduction and you're a higher earner, you don't have to worry about your income reducing the amount of your itemized deductions. That rule, known as the Pease limitation (one of several laws named after their advocates, in this case the late Ohio Democratic Rep. Don Pease who championed deduction limits on higher-income taxpayers) was killed in the TCJA.

However, there is a statutory limit under the TCJA of $10,000 for state and local tax write-offs. That 10-grand limit is the total of your income or sales tax claimed plus your real estate (aka property) taxes.

The mortgage interest deduction limit drops from the old $1 million cap to $750,000 for new mortgage debt after Dec. 15, 2017 ($375,000 for married filing separately taxpayers). The IRS also has issued guidance on the deductibilty under the new law of home equity debt.

You might remember reading something about private mortgage insurance (PMI) still being deductible as an itemized expense, but that's for the 2017 tax year only. For now.  

Casualty losses in 2018 will only be allowed for federally-declared major disasters.

Miscellaneous itemized deductions that had been subject to a floor of 2 percent of adjusted gross income (AGI), such as unreimbursed employee business expenses and tax preparation fees, have been eliminated.

On the plus side for Schedule A filers, the AGI threshold for deducting medical expenses returns to the 7.5 percent level for 2018 and 2019 tax years. It goes back to 10 percent for all filers regardless of age in 2020.

And the AGI limit for charitable contributions has been increased to 60 percent. This won't affect most of us dropping off our kids' outgrown clothes at the church thrift shop or writing a check to the local food bank. It does mean, though that wealthier folks can now give more.

Alternative minimum tax (AMT): This parallel tax was created in the 1960s to ensure that rich taxpayers paid at least some (aka minimum) amount of tax. Originally, it was not indexed for inflation. Congress finally took care of that oversight in 2013, creating inflation indexing of AMT exemption amounts as part of the American Taxpayer Relief Act.

For 2018, the revised inflation-adjusted AMT exemption amounts start at:

• $70,300 for single and head of household taxpayers,
• $109,400 for married couples filing joint returns/surviving spouses, and
• $54,700 for married couples filing separately.

The AMT phaseout threshold amounts this year are increased to $1 million for married taxpayers filing a joint return and $500,000 for all other taxpayers.

Adoption tax credit and assistance programs: Beginning with the 2018 tax year, the credit allowed for a child's adoption is $13,810. That same credit amount also is available for the adoption of a child with special needs.

The available adoption credit begins to phase out for taxpayers with modified adjusted gross income (MAGI) of more than $207,140 and is completely eliminated for taxpayers with MAGI of $247,140 or more.

And that $13,810 amount also is the limit for workplace adoption assistance programs. In these cases, employers can help their workers adopt by excluding up to that amount from the employee's gross, taxable income for the adoption of a child. This covers all adoptions, including those of children with special needs.

As with the credit, the adoption assistance excludable income amount begins to phase out at the same MAGI levels.

Earned Income Tax Credit, or EITC: The Earned Income Tax Credit (EITC), created in the 1960s as part of President Lyndon B. Johnson's War on Poverty, is a major tax break for middle- and lower-income workers. It is not changed under the new tax laws.

The table below shows the 2018 tax year income amounts by filing status used to determine the EITC. Your earnings this year must be less than:

Filing Status	No Children	1 Child	2 Children	3 or More Children
Single,  Head of Household  or Surviving Spouse	$15,270	$40,320	$45,802	$49,194
Married Filing Jointly	$20,950	$46,010	$51,492	$54,884

In addition, if you have what the IRS deems is "excessive investment income," you're not eligible for the EITC. For 2018, that amount is $3,500.

If you do qualify for the EITC in 2018, the maximum credit amounts -- which are refundable, meaning any excess could come back to you, as the name says, as an IRS refund -- are:

• $6,431 for taxpayers filing jointly who have three or more qualifying children,
• $5,716 with two qualifying children,
• $3,461 with one qualifying child and
• $519 if you don't have any qualifying children.

Estate tax: Donald J. Trump and Republican-controlled Congress has hoped to end the estate tax or, as its opponents call it, the death tax. But they finally had to draw the deficit line somewhere, so this tax remains on the books.

However, they did double in 2018 the amount of a decedent's estate value that's excluded from federal taxation. That's $11.18 million this year.

And yes, that new base estate tax exclusion amount will be adjusted for inflation in future years.

There are a few more items in the new IRS inflation announcement. I'll sort through them and post on those figures later.

But for folks ready to do some 2018 tax year planning, the changes here cover the basics for most individual taxpayers. Have at it!

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source http://www.dontmesswithtaxes.com/2018/03/irs-revises-2018-inflation-changes-to-follow-newly-enacted-tax-cuts-and-jobs-act-provisions.html

Phishing tops IRS' 2018 list of Dirty Dozen tax scams

Oscars' box-office bump helps increase tax revenue, too

It's Oscars swag bag and tax time again

NY leads Oscars with 9 nominated films that got Empire State tax breaks

Are You Talking to Clients About Cryptocurrency?

You’ve likely heard of Bitcoin. Maybe even Ripple or Ethereum. But have you paid much attention? No, these are not made-up words, they are forms of Cryptocurrency.

Crypto what? 

A Cryptocurrency is a digital asset (or currency) that is traded and secured using cryptography. You don’t need a bank to trade this currency, you can trade it peer peer on a decentralized control called Blockchain. Blockchain is basically a public transaction database that functions as a distributed ledger.

You might be asking at this point – with no bank or intermediary institution, how is this secure? Well, everything is verified and secured through “Miners” who work within the network to maintain a master ledger – a blockchain, to verify every transaction.

What is Blockchain? 

All of this takes place within a technology called Blockchain. Blockchain is a chain of blocks that exist in a database.  Each block contains a digital ledger of transactions (with time stamps) that have been hashed and encoded, and a cryptographic hash of the block that came before it. All of these blocks are linked to each other because they contain an encryption from the prior block. This creates a layer of security that prevents people from altering details about the transaction after it has occurred. If one block is altered, the rest down the line are altered, and the hack is traceable.

Purchasing Cryptocurrency

Anyone can purchase cryptocurrency using a debit or credit card. You set-up an account, verify your identity (usually with a drivers license), and you’re good to go. Currently, the Cryptocurrency market is experiencing sort of a gold rush because many of the available currencies have been increasing in value rather rapidly. It is quite likely that one or more of your clients have invested in cryptocurrency, which is why you should be sure to ask about it during your tax appointments this season.

How the IRS Views Cryptocurrency

While it has currency in the name, the IRS actually views Cryptocurrency as property – which means there could be capital gains implications. While the IRS hasn’t provided much guidance, as tax pros we all know it’s better to just disclose than to the end up with criminal charges.

So, if you have clients selling, spending, or even exchanging cryptocurrency for other tokens, they will likely have capital gains implications. And, if they were paid in cryptocurrency, they will have to report that as income.

Here’s a rundown of taxable actions with regards to cryptocurrency:

• Trading cryptocurrency: produces capital gains and losses.
• Exchanging cryptocurrency: treated as being sold and is subject to capital gains.
• Receiving payment in cryptocurrency: receipt of payment for goods and services – whether in cryptocurrency or not – is seen as income and must be reported as such.
• Spending cryptocurrency: still a taxable event is and treated as a capital gain or loss.
• Converting a cryptocurrency to a U.S. Dollar: Capital gains
• Mining coins: considered income equal to the fair market value of the coin.

The times they are a changing but the IRS will always want their money. According to MarketWatch, Coinbase, one of the largest cryptocurrency exchanges, will turn over 13,000 users’ data to the IRS within the next 27 days. This year the IRS is making compliance in this area a priority so dot your i’s and cross your t’s tax pros!

source https://www.theincometaxschool.com/blog/are-you-talking-to-clients-about-cryptocurrency/