Many misunderstand crypto, thinking its anonymity hides them from the IRS. In reality, crypto income is taxable. Here’s a guide on how to pay in 2024.

A lot of people still have misconceptions about the way cryptocurrency works. They’ve heard that cryptos provide anonymity, which makes them develop a false assumption that not even the IRS will be able to track the amount of cryptocurrency income they receive.

This, however, is false. Not only do you have to pay taxes on your crypto income, but you also have to follow a strict procedure. Here’s how you can pay taxes on your crypto income in 2024. 

Understand taxable events

The first thing you need to understand is the taxable events in question. There are many different ways to earn crypto income, and identifying some of these events will help you establish the correct procedures for making these payments.  

Trading cryptocurrency

Selling one cryptocurrency and buying another is taxable. This is important because there are new promising cryptocurrencies every day, and keeping track of this is often far from easy. According to crypto expert Michael Graw, most people are interested in the potential for high profits, while some are even motivated by the promise of early investments.

Most importantly, every time a person makes a trade, they have to report the fair market value of the cryptocurrency received. This is a huge obligation that a lot of crypto traders neglect. 

Purchasing goods and services

Cryptocurrencies can be used to buy goods or pay for services. In the majority of countries, states, and jurisdictions, this is susceptible to taxation; however, it’s a lot harder to determine this tax when it’s crypto that we’re talking about. 

The bottom line is that the customer has the exact time of the transaction, and during the reporting process, they have to report the fair market value of the cryptocurrency that was used in the transaction. To some, this may seem as simple as just stating the price in their fiat currency, but it often ends up being slightly more complex.

Selling cryptocurrency

Every time cryptocurrency is sold for fiat currency (like USD or EUR), this is considered a taxable event. In this event, capital gains and capital losses have to be reported. Now, this is basically just a more standard form of the taxable event we’ve described when we talked about trading cryptocurrencies.

The bottom line is that this is, more or less, always the end goal when crypto trading. Crypto adoptions are still not as great as someone will be able to use it for all your acquisitions. In other words, eventually, trading them for fiat is what people are looking for. Keep this in mind before doing so. 

Mining cryptocurrency

Mining cryptocurrency is expensive as it is. Someone has to buy the equipment, invest in adequate software licenses, set it all up, and pay an enormous electricity bill. In today’s climate, it’s questionable what kind of returns you’ll have. 

Now, the last thing someone wants is to calculate all of these expenses and figure out that they’ll be able to break even (or even profit)… because they’ve forgotten that they also have taxes to pay. Mining rewards are an income, and they have to be reported as such. 

Crypto gained through luck-based games

If cryptocurrencies are earned by playing luck-based games on online casinos, even if they are anonymous casinos, winnings have to be reported. Casino winnings, lottery winnings, sports betting, raffle prizes, and sweepstakes all have to be reported. 

Underreporting or misreporting income (even this form of income) is a serious problem for anyone, and it could land someone in a huge deal of legal trouble. Therefore, this mistake should be avoided. 

Calculating gains and losses

Once all the taxable events are identified, it’s time to put all income and expenses/costs on paper. To begin with, any taxable income has to be checked. Just because some value is exchanging hands, this doesn’t mean that someone is better off than before. So, there are a few things that need to be taken into consideration. 

Start by calculating the cost basis. This means the exact date and time has to be noted, as well as the amount of money that was originally paid for the cryptocurrency in question. This includes the acquisition fees.

Next, the so-called fair market value has to be provided. This is the cost of cryptocurrency at the time of acquisition (at the time of the taxable event mentioned in the last section). 

The most important part of this is the so-called capital gains. This implies that, at the time of the sale, the value of the crypto asset was higher than at the time of acquisition.

There’s also the opposite scenario, where the market value is lower than it was during the acquisition. 

Federal vs. local taxation of cryptocurrencies

When it comes to the federal income tax, the IRS considers crypto assets to be similar to property. This means that they’re subject to capital gains tax rules. 

State taxation varies by state. For instance, there are income-tax states and no-income-tax states, but there are also specific state regulations, which means that the state in question may offer tax incentives related to cryptocurrency. One example is Wyoming, which is quite proactive in creating a favorable regulatory environment for crypto businesses and users. 

As more and more merchants accept crypto assets as payments, the question of state and local taxation of these resources becomes an even more important issue than before. The importance and adoption of cryptoassets are bound to increase further in the future, which is why understanding the regulations surrounding it become such a high priority for everyone. 

Importance of reporting and keeping detailed records

Knowing how much has to be paid and just paying is merely one in a long series of necessary tasks to complete in order to settle obligations toward the IRS.

When it comes to reporting income from crypto activities, the right forms like 1040, 8949, and Schedule D are to be used. It all depends on whether money was made from mining, staking, or selling and trading. 

Most importantly, all the detailed records have to be kept. A detailed transaction history with all receipts and statements and wallet addresses (of wallets involved in your transactions) have to be kept. 

All of this can be made easier by using the right tax software. The user has to make sure to specify that they’re looking into software that supports crypto and crypto income. Let’s face it: in 2024, cryptocurrencies are such a vital part of our finances that the request is more than reasonable. 

Crypto income is taxable; evading taxes can lead to serious trouble

It is 2024, and cryptocurrencies are no longer unregulated. They’re also no longer small and insignificant enough that they fly under the radar of the IRS. Settle all responsibilities toward the IRS. All the resources on the subject matter are available, which is why the idea that someone doesn’t know how to do this no longer holds up.

Solana is set to close the year above $250. Meanwhile, investors are attracted to XRP and DTX Exchange thanks to their budget-friendliness and growth prospects.

Quarter four has historically been the most bullish period for cryptocurrencies; positioning couldn’t be more crucial. Solana’s (SOL) price outlook for the final three months is bullish. It is set to regain lost price levels and end the year on a high note, making it one of the altcoins to watch.

Meanwhile, budget-friendly tokens with low entry points continue to win investors’ hearts. At the forefront are Ripple (XRP), a cross-border payment protocol and DTX Exchange (DTX), a new hybrid exchange protocol. INTL, a top ICO, is quickly becoming an investor favorite, boasting innovative use cases and significant upside potential.

DTX Exchange: A new DeFi protocol on investors’ radars

DTX Exchange, a new hybrid exchange protocol, stands out thanks to its blend of CEX and DEX. Unlike conventional trading platforms, it offers the best of both worlds, pushing the presale past $2.6 million amid a fever to become early adopters.

As an emerging cryptocurrency, one of its many attractions is its low entry point. Additionally, its growth prospects are astounding. The ICO is in the third round and costs $0.06 but with a projected 65x upside potential after its market debut.

The above makes it a more compelling alternative to top altcoins like Solana and Ripple. Besides the gains, its impending transformation of the $10 billion global trading scene places it on the list of new DeFi projects to watch out for. Some of its competitive advantages include the trading of diverse assets across TradFi and DeFi and non-custodial trading.

Solana: Bullish Q4 outlook

Solana, one of the best cryptos to invest in, is a must-have this year. Its DeFi capability makes it one of the most sought-after among developers and projects. In addition, its ecosystem of dApps and memecoins is largely unrivalled in the crypto space.

While the year has been a rollercoaster, it is a great one nonetheless. On the yearly chart, the Solana price increased over 500%, indicating how good of an investment it has been. Although the past month has been bearish—a 7% decline in the past 30 days—its outlook remains bullish.

Its outlook for the rest of the year couldn’t be more promising, tipped for a rally past $250. This bullish Solana price prediction highlights its significant upside potential, thanks to its rapidly growing ecosystem and features like fast transaction speed and low costs.

Ripple: Road to $5

Ripple, one of the top altcoins, is an investor favorite for good reasons. For one, the payment-based cryptocurrency is budget-friendly—ridiculously undervalued, according to top analysts. Recent developments like the launch of Grayscale XRP Fund and relisting on Robinhood paint a promising picture.

The XRP price, retailing below $1, provides one of the best entry points, considering its growth prospects. Reflecting bullish trends, the XRP coin has been up 8% in the past 7 days, trading at $0.58. With plenty of room to run at the current price, it is no surprise that investors have been betting big.

As it prepares to end the year strongly, with eyes on a Fed rate cut and the US presidency, a jump past $5 is suggested. This XRP price prediction paints a new ATH for the top crypto coin, outclassing previous bull cycle performance.

Conclusion

Solana, one of the best cryptos, is tipped for a rally past $250 before the curtain closes on the year. Meanwhile, Ripple, a top crypto and DTX Exchange, a new ICO, are on investors’ radars thanks to their budget-friendliness. With plenty of room for growth, these are promising waves to take advantage of.

To learn more, visit the presale website, the official DTX website, and join the DTX community.

Donald Trump is set to launch a new crypto exchange, World Liberty Financial, sparking interest in altcoins like Toncoin, Intel Markets, and Ethereum.

The crypto space is expected to heat up soon. This is because Donald Trump will announce the launch of World Liberty Financial, a new crypto exchange run by his family members. To prepare for this potential bullish rally, traders are looking at altcoins that could surge. Analysts are focusing on three of them: Toncoin (TON), Intel Markets (INTL) and Ethereum (ETH).

Recently, Toncoin saw a major listing announcement from LCX, while Intel Markets is selling out quickly in stage 2 of its presale. Plus, market analyst CryptoBullet remains bullish for Ethereum. Keep reading as we discuss all these altcoins.

Toncoin: New listing on LCX

Toncoin is one of the best altcoins at the moment. Recently, LCX announced that it will list Toncoin. With this development, more people will get access to this coin. As more eyes are on it, demand for it will rise, followed by its value. Speaking of which, the Toncoin crypto value jumped nearly 5% in the past week alone.

This increase can be attributed to hype surrounding the Toncoin token airdrops. For example, Hamster Kombat and Catizen tokens will see airdrops in September. Additionally, Toncoin is trading above its 20-day EMAs. Due to all these bullish Toncoin news and signals, experts forecast a potential rise to $6 before October ends.

Intel Markets: One of the best altcoins to buy

Intel Markets is also an altcoin making some noise in its presale run. Over 4m INTL tokens are now sold. This achievement has helped Intel Markets raise over $360k so far and may potentially reach $1m before the end of this month. People are interested in what Intel Markets has to offer.

Essentially, Intel Markets will combine the blockchain and DeFi space with AI technology. It will bring a one-of-a-kind AI-powered smart trading platform. Thus, people will benefit from this technology when trading. For instance, in standard trading interfaces, traders get mixed signals. But this will not be the case on Intel Markets, as the Intell-Array™ monitoring system will review every indicator and create holistic signals.

The INTL native token is a big part of this project. It is now in Stage 2 of its presale, which is selling out quickly. It costs $0.018182, but this price could surge to $0.027364 after Stage 3 begins. Since Intel Markets also taps into the AI market, which is projected to reach $826B by 2030 as per Statista, its long-term growth potential is great. Experts predict this altcoin could soar by 1,100% after a Tier-1 CEX lists it this year.

Ethereum: Prominent analyst remains confident

No altcoin list would be complete without Ethereum. According to CoinMarketCap data, the price of Ethereum has jumped over 40% on the YTD chart. Crypto analyst CryptoBullet says that ETH now sees the exact triple bottom as it did in 2021. According to his X post, this altcoin could see one of the hottest Q4 in 2024.

Recently, QCP also revealed that interest in the options market for Ethereum crypto is renewing. Over 20,000 contracts are targeting the $3,000 level by December 27. As a result, experts in the crypto field have a new Ethereum price prediction. They forecast that this altcoin may trade at $2,500 in October.

Final thoughts

Toncoin, Intel Markets and Ethereum are all altcoins to watch. But one of them could surge faster than the others. This is Intel Markets since it has a smaller market cap than its peers. Thus, INTL needs less money for its price to surge. Given its dual-chain functionality, which supports both Solana and Ethereum blockchains, and its ties to the AI market, INTL’s long-term growth potential could be amazing.

To learn more about Intel Markets, visit the website, Telegram and Twitter.