A month ago I published a newsletter explaining the process of how I am calculating my cryptocurrency taxes. I just finished this week. All in all, it took me somewhere in the neighbourhood of 25-30 to complete my cryptocurrency tax report. Some of my private readers have reached out to me in the last couple of weeks with the sentiment of “I should have started this earlier”.
In the end, I’m left with one question. Was it worth it?
Is Cryptocurrency Worth It?
It is times like this that I feel like just having a well paying job at a big tech company would make my life easier. I could hire a professional accountant to take care of my vanilla tax situation. Most of my taxes would have been deducted at source from my employer, and in the end I would either owe a bit, or get a little bit back.
The situation I’m finding myself in now is that I owe a good chunk of money to the government this year because of how well cryptocurrencies performed in 2021. Since I do all sorts of balancing of my portfolio throughout the year, I made 13,582 transactions.
7,854 deposits (income, staking rewards, airdrops, etc)
2,282 withdrawals (spending, disposals, losses)
Every one of those transactions carry with it some sort of taxable event. Not all of them increase my taxes, some of them will decrease it. But in the end, I owe the government a non-trivial amount of money.
To answer my earlier question… is it worth it? I think so.
My Koinly Tax Report
I’ve decided to give my private subscribers access to a
redacted version of my tax report.