2020 Tax Form Has Major Implications for Crypto

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One little question on Form 1040 (the standard tax form) is going to rock the crypto world. The IRS just released a draft of next year's 1040, and it asks ALL taxpayers in the United States whether they had financial interest in crypto.

If you check YES, you will need to include a full report (although you might not actually owe anything). If you falsely check NO, you could set yourself up for steep financial penalties and, in extreme cases, prison.

When you’re dealing with the IRS, the difference between small penalties and severe ones typically comes down to the concept of willfulness. Did you knowingly try to cheat the IRS, or did you make an honest mistake? Willful tax crimes are treated much more harshly.

This question was on the 2019 tax return, too, but only on Schedule 1, where some taxpayers may have missed it. The new 2020 placement—front and center on the standard form for all taxpayers—makes it hard to argue that you accidentally failed to report.

Want to stay out of trouble with the IRS? Call 847-440-5716 to schedule a confidential consultation with a crypto tax attorney.

For more updates and information on crypto tax follow our social media:
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Crypto Investing
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