Bitcoin payment processing company BitPay recently announced alliance with Libra Tax in the wake of the upcoming tax reporting session in the US.
The deal enables BitPay to forward Libra’s Bitcoin tax account service to its merchants, which include major companies like Microsoft and Overstock that started accepting the digital currency back in 2014. As per the IRS ruling on virtual currencies that came into effect the same year, the businesses and individuals were made liable to treat their Bitcoin profits/losses like a usual stock or bond. This means that each and every of their sale/exchange made with a digital currency needs to be taken into account at tax time.
The Bitcoin-bases taxes however are applicable only when there are certain gains made from them. The only trouble merchants are prone to face is documenting these profits/losses accurately to the tax authority, a thing which would likely worry a lot of digital currency merchants in coming days.
“It’s tax season,” BitPay CFO Bryan Kohn elaborated, “and if your business accepts crypto-currencies, like Bitcoin, then you need to get through the headache of reporting your bitcoin transactions to the IRS.”
He further advocated Libra’s new software as a “painless” solution for Bitcoin businesses when it comes to reporting transactions, saying that it is “is an easy way to track Bitcoin transactions while staying compliant with the IRS guidelines.”
And Libra Tax indeed has hit a home run with their new and rather innovative tax solution software tool, Libra Business. This heavily coded application records transactions directly from the Bitcoin’s public ledger — the blockchain, a feature that ultimately aids businesses/individuals in recording their transactions easily and efficiently, without much human involvement. The new software further aids merchants in reporting capital gains/losses to their local tax department.