The cryptocurrency community in the United States is coming under the IRS scanner lately. The taxation authority has been exploring ways to find defaulters who have failed to report the gains obtained from their cryptocurrency holdings. It even went as far as issuing a John Doe summons to Coinbase, the leading cryptocurrency platform, asking them to furnish all the details of its customers including their cryptocurrency holdings. However, the cryptocurrency users have a different problem, as many of them don’t have a clue about how to file the returns, thanks to the lack of clarity and comprehensive guidelines from the IRS.
Node40, the leading blockchain infrastructure hosting service provider, is making the whole process easier with its recently launched Node40 Balance — a cryptocurrency tax calculation software. The new software will plug a huge void in the industry, which is currently flooded with conventional bookkeeping products and services that are no good for calculating the gains and losses incurred by digital currency transactions and holdings. Unlike other traditional assets, cryptocurrencies are known for their volatility which makes it much harder to manually factor in the value of each incoming bitcoin and the increase or decrease in its price over a period of time.
The company announced the launch of its Node40 Balance earlier yesterday in a press release. The software is designed to track and make cost-basis calculations by directly pulling the transaction related information from the blockchain. The processed calculation is then added to the IRS Form 8949, making it easier to file returns. The Node40 Balance currently supports Dash, and in the next few days, it will include Bitcoin support as well.
The press release quotes the CEO of Node4o, Perry Woodin explaining the attended saying,
“Node40 Balance is a feature packed blockchain accounting service that brings the familiarity of services like QuickBooks or TurboTax to the world of digital currency. Node40 Balance analyzes the blockchain and provides valuation data for all of your transactions. You annotate your transactions according to your real-world needs and Node40 Balance provides reports with your gains, losses, and income. What makes Node40 Balance unique is the precision in which gains and losses are calculated. A simple FIFO strategy is not sufficient for dealing with digital currency transactions. Node40 Balance uses the true carrying cost and days held to calculate precise valuations that ensure you are not over-reporting your tax liability.”
The recent performance of Bitcoin and other cryptocurrencies before the end of tax season has led to a substantial increase in the value of the digital currency holdings of many. These gains, calculated based on the initial value of the tokens at the time of receipt will be liable to taxes. Launched at the ideal time, cryptocurrency investors and holders can now use Node40 Balance to calculate their exact tax liabilities and settle them as well.
Node40 Balance is being offered by the company as a Software as a Service (SaaS), and people can buy a subscription to use it. Currently, the subscriptions are available for one, three and twelve month periods. With the new offering, Node40 has gained an edge over its counterparts. In the coming days, more people are expected to start using the service to file their crypto-related taxes.
The success of Node40 will also encourage other companies to come up with their own versions of digital currency tax calculating applications.
Ref: press statement | Image: Shutterstock