Month: May 2019

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Tax On Cryptocurrencies

May 17, 2019 | Finance | No Comments

The season of Tax is the time when taxpayers prepare their financial accounts and reports of the year prior. It commences in January and concludes in April. For many taxpayers, preparing tax could be a bit difficult especially if they are hopeful for a better return on their tax, which is why they employ the help of a Tucson tax preparer or any other tax prepare in their locale. In the US, the annual tax returns of individuals must be filed by the 15th of April subsequent the reported earnings.

Taxes are obligatory fees levied or imposed on people and businesses or corporations and is implemented by a local, regional or national government so as to finance public services and programs and government undertakings. In economics, these taxes befall whoever pays the tax, such as businesses and the consumers of the products and goods.

Tax on Cryptocurrencies

By now, we all know that cryptocurrencies are digital currencies or virtual money that is built with cryptographic codes that provide secure transactions. Cryptocurrencies are difficult to fake compared to the traditional currency that we have. Because of its rising popularity and use, the law considers cryptocurrencies as property, which are subjected to the regulations of capital gains and losses similar to reals estate, bonds, stocks, as well as other types of property. Hence, tax should be levied.

In the US, paying taxes on cryptocurrecines like Bitcoin has become a priority for many individuals after the Internal Revenue Service or IRS publicized on the 2nd of July 2018 that one of their primary efforts for the year is the taxation of cryptocurrencies or virtual currencies.

With cryptocurrencies, the challenge related to taxes is the data or records composing the all transactions such as the mining income, buys and sells, trades and transfers, as well as other activities involving cryptocurrencies. These data or records are most probably distributed across numerous diverse platforms and exchanges, therefore making the calculation of tax and the process of reporting very difficult.

Making Crypto Tax Reporting Easier

Always keep a record of all your cryptocurrency exchange, where you sold or bought them.

Keep records or accounts of any cryptocurrencies that you have received or accepted as an income

Learn and train yourself to calculate or compute your bitcoin gains and losses as well as on your investments on cryptocurrencies

Just like taxpayers who seek help from tax preparers, get the advice or help of an expert on crypto tax

Report your losses on cryptocurrencies to save on your US tax bill

Some owners of small businesses are already experts when it comes to financial management. Some have previous experience when it comes to handling small businesses and they even have enough knowledge and deeper understanding of business accounting. 

If you belong to those who are planning to start a small business or you already have a business and you want to be able to handle your finances effectively, then you must keep on reading. Moreover, this is to those with little-to-no finance experience.

Important Terms to Know When it Comes to Business Accounting:

1. Gross Revenue- This can also be called total revenue which is the sum of payments you received from your customers in return for the company’s product or service prior to deducting other expenses.

2. Expenses- this quite common sense. Expenses refer to anything that keep your gross revenue from going to straight to your pocket such as rent, supplies, payroll, taxes, and other operational expenses.

3.Net Profit– This is sometimes referred to as the bottom line, net income or net earnings. This is what’s from all the expenses and profit. You will know that you are creating profit if the net profit is positive. If it s negative they you have to take action. I know someone who experience, this, hence they look for payday loans near me. 

4. Break-even Point-  There will come a time where small businesses will experience temporary loss especially during the first few months of starting a business. Hence, their expenses are greater than their profit. If your expenses are just equal to the net revenue, it is called break-even

Important Documents in Business Accounting 

1.Balance Sheet- this is where you can see a glimpse of your business’ financial status. You can find the assets, liabilities, and equity your company holds in the balance sheet. Basically this will make your tasks easier.

2. Income Statement- This is also referred to as the profit and loss statement and can be a summary of your business revenues and expenses all throughout the year. Moreover, income statement allows you to easily calculate how much you earned. It is crucial to maintain an accurate and consistent income statement because this will be used to determine the break even point for small and new businesses.

To someone whoa is just starting a business, he/she will find the guidelines and documents overwhelming especially preferred to handle manually. Fortunately, because of technology advancement, there are various open software available that will handle your bookkeeping.

Peer-to-peer or P2P lending reviews, like the grupeer review, are quite favorable since borrowers and lenders both gain from it.

For borrowers, P2P lending grants interest rates that are lower as well as a chance to obtain credit for individuals who have a spoiled their credit history. On the other hand, investors or lenders who lend via platforms of P2P delight in a considerably higher rate of interest than any other savings account can tender.

Some investors or lenders consistently collect returns at around 8% to 13% yearly. Furthermore, both lenders and borrowers gain from bettered transparency.

Although P2P lending has transformed the manner people borrow, save as well as invest money, this lending sector itself is being disturbed by providers of cryptocurrencies. Supporter of cryptocurrency assert that the technology on blockchain can genuinely have a result that’s transformative on P2P lending. Debatably, utilizing cryptocurrencies such as bitcoin and ether for P2P lending will grant scalability, transparency and efficiency that is much greater as well as the possibility of lower costs.

Cryptocurrency, what is it and why is it worthwhile?

Cryptocurrency have already made the headlines, so by this time, almost every person has an idea of what cyptocurrency is. For those who do not, cryptocurrencies are also termed as digital money, virtual currencies, or simply as tokens. They aren’t similar to any standard currency that the world uses. These digital currencies could only be utilized online. One distinguishing attribute of cryptocurrencies is that they are decentralized. This denotes that it is not controlled by anyone, it is entirely unconnected to central governments or banks.

Cryptocurrencies are structured and systematized over a network called blockchain. A blockchain is a ledger that is shared and distributed wherein it records each and every single transaction.  These transactions made on blockchain are irreversible and permanent and intrinsically transparent, causing the transaction to be more valuable and reliable

What are the notable benefits of cryptocurrencies?

Transaction fees are minimal. When compared to credit card transaction fees, digital currencies have zero to minimal transaction fees.

You are the owner. In banks, when your money is kept there, it could be frozen or restricted by the bank itself, the government or by another unit. With cryptocurrencies, provided that you have the private key as well as the matching public key that constitute the address of a token, nobody could take that from you.

It is accessible. There are thousands to millions of individuals around the globe who are unbanked. However, anyone who has internet access to could use cryptocurrencies to send and receive payments.

It is prompt and quick. Using wire transfers and cheques could take 3 to 5 business days for it to be cleared and received. Transactions using cryptocurrencies are almost prompt and fast, with operations that are more complicated taking only 10–20 minutes.

Identity is safe and secured. When doing online shopping, it is at all times a necessity to input all your personal and sensitive data, like your credit card details. This poses serious risks. With cryptocurrencies, money could directly be sent to the receiver without divulging any sensitive info apart from the total amount of payment.

Cryptocurrencies are alternatives that are unsoiled and transparent to institute fiat currencies as well as  a technology that changes society for the better. Merging the advantages of P2P lending with the blockchain technology will make lending and borrowing as well as saving money very simple, efficient and transparent.

As for a small business owner who is considering financing offers, the duration and amount of financing are two factors to be taken into account. To ensure that there’s better cash flow as well as turnaround on credit line, it’s preferable to opt for short term financing. What this mean is, the amount you pay back is already fixed for the said term.

Furthermore, this puts away your business from any risks if mandated to payback a portion of your profits.

Smart Loan Decisions

If you wish to minimize payables, then seeking for long term loans will be wise. However, this is going to compromise the funds you could withdraw and used as working capital since it takes longer to pay back the loan. This is why the “no commitment” and “free early payoff” offered in short term loans are more attractive among SMEs.

Moving over to your credibility with bank loans, you’d do fine given that you are paying on or before due date. On short term loans, it is likely to gain points by simply

  • Paying earlier than the expected due date
  • Paying more than the payment required or
  • Paying on time

These three factors can help big time especially when you seek additional funding before completing your first loan.

Think of short term loan as credit card.

You’ll be given a 10,000 dollars credit line and paying most of it for few months entitles you for an increase.

So let’s say for example that you want to use that money to trade on crypto signal, and you were that good allowing you to get more than half of your ROI in just a short span of time, you can use your profits to pay for your loan and get an increase. This increase will serve as backup whenever you need to add more to your account.

Should Always Be an Open Communication

Another thing to check is the responsiveness of the financing organization. With financing firms offer short term, you’ll get an actual person as point of contact than established banks and larger companies to which most probably, redirect you to their general customer service department.

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