President Biden signed the $1.2 trillion Infrastructure Bill into law today providing investments into America’s infrastructure, so you may be wondering “what does the Infrastructure bill mean for my taxes?”
Here are a few key things you need to know about the Infrastructure Bill and your taxes:
The Infrastructure Bill does not contain much that impacts taxes, but if you are one of the millions diving into the crypto investment explosion, the bill does contain a cryptocurrency provision.
Does the new cryptocurrency provision impact my 2021 taxes?
No, it does not impact your 2021 taxes and it is not in effect until tax year 2023.
What is the new cryptocurrency provision?
The measure would require brokers to report transactions of digital assets to the Internal Revenue Service (IRS), beginning in 2023. It also would require businesses to report cryptocurrency transactions of more than $10,000, which is the current threshold for cash transactions subject to IRS reporting requirements.
If I sold cryptocurrency in 2021 and my broker was not required to report my transactions, do I still have to claim my sales transactions?
Yes, the IRS still issued guidance on cryptocurrency, first in 2014 and again in 2019. The IRS states that cryptocurrency or virtual currency is treated as property for Federal income tax purposes, so you have to report any gains or losses on the sale of your cryptocurrency as you would with the sale of stock. The first page of IRS Form 1040 also includes a question about whether you received, sold, sent, exchanged, or acquired any financial interest in any virtual currency.
Check out our free Cryptocurrency Tax Interactive Calculator, that in just one screen, will answer your burning questions about your cryptocurrency/Bitcoin sales and give you an estimate of how much your sales will be taxed and much more. To help you with your tax planning for tax year 2021, you can also find out if you have a capital gain or loss and compare your tax outcome of a short term versus long term capital gain, whether you already sold or you are considering selling. Our free cryptocurrency tax interactive will help you estimate your taxes on your sales whether you received your cryptocurrency through purchase, as a payment for services, or in exchange for goods.
I heard there is another bill that may have more tax provisions, what are they?
There is another bill being proposed called the Build Better Back Plan, however we cannot speculate on provisions that will be passed. If and when any tax laws pass or change, TurboTax will be up to date with the latest tax laws. Check back with the TurboTax blog where we will keep you up to date on the latest tax law changes.
At tax time, TurboTax will ask simple questions about you and give you the tax deductions and credits you are eligible for. If you have questions you can connect live via one-way video to a TurboTax Live CPA or tax expert to get your questions answered along the way, have your taxes reviewed, or fully hand over your taxes from the comfort of your home. If you invest in cryptocurrency, TurboTax Premier can import up to 4,000 cryptocurrency transactions at once.