BlockFi has partnered with TaxBit, the leading tax and accounting software provider for the digital economy, to offer new crypto tax reporting tools to its US customers through its newly launched BlockFi Tax Center.
BlockFi, a high yield crypto lender and trading platform, announced the news in a blog post on Thursday, August 19. According to the company, the partnership will enable its US-only clients to access TaxBit’s expertise on the BlockFi platform through the new BlockFi Tax Center.
Starting from August 19, eligible US customers will have “access to a full suite of tax tools natively within BlockFi’s platform, including tax reporting, tax planning, tax-loss harvesting and trading optimized to take advantage of tax-planning opportunities.”
According to BlockFi, this move has a background connected with the US Internal Revenue Service (IRS) that requires crypto holders to report their holding to it. As Crypto Economy reported, in 2019, IRS sent letters and notices to cryptocurrency holders to report their crypto income in their tax filings and 1099-B Form. BlockFi Tax Center, with the help of TaxBit, will track all information at the transaction level to provide clients with Form 1099-B, which is necessary to properly submit tax filings.
Furthermore, the service will also allow to “fill in any transaction information occurring outside BlockFi’s platform in order to furnish a completed tax form that is ready to file.”
Zac Prince, Founder and CEO of BlockFi, commented:
“We’re always looking for ways to make it easier for clients to improve their financial planning, and we know that tax exposure can be a daunting task for crypto investors. That’s why we’re thrilled to be the first integration with TaxBit, harnessing their expertise to untangle the complexities of the tax system for our client base.”
TaxBit CEO Austin Woodward said:
“We are excited to partner with BlockFi and launch the BlockFi Tax Center. BlockFi is the first crypto native platform to provide its users with real-time gain and loss data, powerful tax-loss harvesting and optimization tools, and year-end tax forms that are ready for users to file. This partnership removes the complexities of digital asset tax reporting in a user-centric way.”
Taxing the cryptocurrency industry has been a hot topic in the recent Senate-passed US Infrastructure Bill. As reported, the original language of bill required any node or miner, as well as software developers, to be categorized as a broker and required tax reporting to the IRS. Due to strong opposition, an amendment was proposed to change the definition of broker, only categorizing crypto exchanges as broker. But the amendment was rejected a lone Senator.
The bill has been passed by the US Senate with the original crypto problematic provisions and is now on the way to the U.S. House of Representatives for review this autumn.