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Archive for Dannylle Milford

Are Virtual Currencies Taxable?

With virtual currencies like Bitcoin becoming more mainstream in recent years, we often get asked if revenue from the sale or exchange of these digital dollars is taxable. The simple answer is, YES – income (or profit) from virtual currency transactions is reportable on your income tax return. However, because this is still a relatively new phenomenon, there are a few things you should be aware of to make sure you don’t get caught with a huge tax bill!

Virtual currency, as generally defined, is a digital representation of value that functions in the same manner as a country’s traditional currency. Bitcoin is one example of a convertible virtual currency which can be digitally traded between users and purchased for, or exchanged into, U.S. dollars, Euros and other real or virtual currencies. There are currently more than 1,500 known virtual currencies. Because transactions in virtual currencies can be difficult to trace and have an inherently anonymous aspect, some taxpayers could be tempted to hide taxable income from the IRS. Read more

IRS Bills, Penalties And Interest Charges

Generally, April 15th is the deadline for most people to file their individual income tax returns and pay any tax due. During its initial processing, the IRS checks for mathematical accuracy on your tax return. When processing is complete, if you owe any tax, penalties or interest, you’ll receive a bill which you’re responsible for paying. Interest and penalties can add up quickly if you don’t pay the full amount right away. Read more