IRS reminds taxpayers of crypto income reporting ahead of 2022 filing

CoinTelegraph reported:

With the deadline approaching for filing the 2022 federal income tax return, the Internal Revenue Service (IRS) — an enforcement agency of United States federal tax laws — released a list of reporting requirements for the general public dealing with cryptocurrencies.

Until 2021, the IRS used the term “virtual currencies” in income tax-related reporting forms, which have been updated to “digital assets.” All U.S. citizens must answer questions about cryptocurrencies “regardless of whether they engaged in any transactions involving digital assets.”

The question about digital asset income features in three forms — 1040, Individual Income Tax Return; 1040-SR, U.S. Tax Return for Seniors; and 1040-NR, the U.S. Nonresident Alien Income Tax Return, which asks:

“At any time during 2022, did you: (a) receive (as a reward, award or payment for property or services); or (b) sell, exchange, gift or otherwise dispose of a digital asset (or a financial interest in a digital asset)?”

While all tax filers are required to answer the above question with a yes or no, the IRS provided nine instances when one must check “Yes,” as shown below:

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IRS checklist of declarations related to cryptocurrency. Source: irs.gov

The above recommendations boil down to receiving, earning, transferring or selling cryptocurrencies for any monetary benefit, including mining and staking. In addition to checking “yes,” eligible taxpayers are required to report all income related to their digital asset transactions.

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Revised 2022 instructions for Form 1040 (and 1040-SR). Source: irs.gov

The only instances when one can check “No” in the filing is if they have been purely holding the crypto assets, transferred assets between wallets they own or purchased cryptocurrencies against fiat currencies.

Related: US authorities to intensify scrutiny of crypto industry in 2023

A bill recently pitched during the first session of the Arizona State Senate in 2023 proposed having Arizona residents decide on amending the state’s constitution in regard to property taxes.

As Cointelegraph reported, the SCR 1007 bill went through two readings as part of the state Senate’s calendar, on Jan. 19 and Jan. 23.

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