It’s almost tax season in the United States and if you are like most cryptocurrency traders and holders in the US, it is among the most stressful periods of the year. However, according to Ernst & Young, it doesn’t have to be that way.
The global professional services firm has launched a web-based software as a service tax product specifically to help with cryptocurrency reporting for its clients. Dubbed EY CryptoPrep, the new service works automatically obtaining client trading data from the leading cryptocurrency platforms to create a complete Form 8949 ready for download. The service is created to get rid of all the hustle involved in tracking your trades across multiple trading platforms for various cryptocurrency assets.
According to an announcement by the Big Four accounting firm on Thursday, the EY CryptoPrep service supports a lot of the leading cryptocurrencies but not all. This means that for those investors that partake in trading obscure assets, they will have to modify their data before printing the form to correctly reflect their annual investments. The Internal Revenue Service (IRS) requires that all US residents report all their gains and losses resulting from activities associated with buying, selling, and holding virtual assets.
“Cryptocurrency transactions trigger tax filing obligations on the basis of the resulting capital gains or losses. EY CryptoPrep calculates crypto responsibilities for the current tax year and even enables users to submit amended returns for prior years to reconcile previous tax liabilities,” EY noted in the announcement.
EY America’s Vice Chair of Tax Services Marna Ricker said in a statement that the development of the new service product was necessitated by the increasing demand by EY clients. According to Ricker, more of its clients are engaging in cryptocurrency trading and investing.
“Our clients increasingly hold and trade crypto assets, creating the need for an innovative solution to address the evolving complexity around filing crypto taxes,” he said. “The EY Foundry, our internal corporate venturing unit, created EY CryptoPrep to modernize the crypto tax accounting process.”
Expectedly, using the EY CryptoPrep is not particularly cheap. Service costs start from as low as $49 for crypto transactions not exceeding 20. For retail traders, this sum rises to a high of $399 for over 100 transactions but less than 1000. More than that and EY recommends using custom pricing and services, something that will appeal to institutional and professional traders.
“EY CryptoPrep expands our innovative portfolio of successful new digital businesses. [It] is another great showcase of our commitment to address the evolving needs of our clients,” EY Foundry Leader Chirag Patel commented.