Every year, we are received by the inevitable annual teacher – the tax season! For those residing in the countries of the tax haven, this may be your last concern. However, for our rest, taxes are an unfortunate fact that we must face sooner or later.
But it is not all death and depression. You can save thousands of dollars on your encryption tax obligations with strategic planning and appropriate tools. Here are some easy ways to help you reduce the tax bill this season:
1. Take advantage of the long -term retaining period
The duration you hold on your encryption can significantly affect your tax obligations. In many judicial states (for example, the United States of America, the United Kingdom, Australia, etc.), adhering to the cryptocurrency for more than a year before selling or exchanging encryption may make you eligible Long -term capital profit rates.
Usually, this Long -term rates are more convenient It is short -term rates, which are applied to investments that have been held for less than 12 months.
For example, suppose you bought BTC on January 1, 2023 and then sold it on September 1, 2023 for a $ 100,000 profit. This will be considered short -term capital gains in the United States (as sold after 10 months), and thus taxes are imposed on the Federal Income Tax rate for this 24 % segment.
Note: This account depends on the assumption that you have no other income or short -term capital gains during the fiscal year period.
However, suppose you will stick to this BTC and instead sell it on the first of February 2024 – it is still for $ 100,000. Then this is considered long -term capital gains (as sold after 13 months) and taxes are imposed on them at a rate of 15 %.
2. Harvesting your losses
Another tactical tax harvest that you can do to reduce the total capital gains for the fiscal year period. This can be done by Sell your encryption assets with a loss to compensate for your capital gainsReducing the total tax bill.
For example, suppose you buy 1 BTC for $ 50,000. After sticking to it for a while, I decided to sell it when the value decreases to 45,000 dollars – the capital loss incurred $ 5,000.
During the same year, you can also buy 100 SOL for $ 4000. The value of the Sol Triples, with 100 so now at $ 12,000. Consequently, you decide to benefit from these prices and sell all your Sol – which leads to a profit of 8,000 dollars ($ 12,000 – 4000 dollars).
In this case, you can compensate for your $ 8,000 capital gains with your capital loss of $ 5,000. As a result, you are only responsible for the capital profit tax on the remaining $ 3000, which reduces your tax burden.
3. Take advantage of the encryption tax calculator
Calculator Calculator (CTC) Simplify and reduce your taxes Automation of the process of calculating your encryption tax obligations. By importing your transaction data from various stock exchanges and portfolios, the platform determines the accuracy of your gains and capital, which saves you valuable time and reduces errors exposed to manual accounts.
CTC also has a tax harvesting tool, which highlights the distinctive symbols and NFTS that you can sell to reduce your tax burden that you must stick to in order to be eligible to get a long -term CGT discount. The calculator also supports a variety of inventory methods that you can change based on your preferences (see Point 4).
In partnership with Coinstats, CTC is All users offer $ 30 from any plan! subscription here And get your taxes today.
4. Use the most effective tax stock method
Inventory methods indicate the way you match the cost rules with sales of your encryption assets, which are particularly related in the situations where you bought the same cryptocurrency with multiple price points. This can significantly affect your capital account accounts, which can pay excess taxes.
Various countries also have different inventory methods (for example, the UK has specific inventory methods defined by HMRC), which you need to be familiar with (see more about this here).
Fortunately for you, Code Calculator‘s Most of the effective tax stock method It will choose to take over at higher prices because it will lead to greater losses or smaller gains. This inventory method also provides short -term gains to ripen into long -term gains, which leads to a long -term tax. This option can be found on the “reports” page in CTC.
5. Investing through the retirement fund
Finally, one of the most effective ways to provide taxes is to invest in encryption through your pension box. Although all countries do not provide pension systems, those in the judicial states such as the United States, Canada, the United Kingdom, Australia, etc. … are usually recorded in the pension scheme.
Your contributions to your retirement box It is usually exempt from taxesThis allows you to reduce your tax income for this year. In addition, profits from your investments in your retirement box (including gains from Crypto) Often imposing taxes at a lower rate From standard capital gain tax, and in some cases, you can already postpone taxes until you decide to withdraw your money upon retirement.
conclusion
As you can say now, reducing your encryption tax bill is not difficult. All it takes is to use some simple strategies such as keeping the long -term assets, losses in harvesting, and using effective tax stocks. You can also choose to invest in encryption via your retirement box to take advantage of tax benefits.
And do not forget that Using tools like Code Calculator To simplify your tax accounts and increase your tax savings. Control encryption taxes today and start saving more of your money that has been acquired by hardest!
