SAN FRANCISCO--(BUSINESS WIRE)--As the April 18 U.S. tax filing deadline rapidly approaches, cryptocurrency investors find themselves ill-prepared to file taxes on their earnings, according to a new survey released today by CoinTracker, the market leader in cryptocurrency tax and portfolio tracking for consumers. In a nationwide survey of U.S. cryptocurrency investors commissioned by CoinTracker, Wakefield Research uncovered that 96 percent of respondents had not filed their tax returns as of March 27, 2022, possibly because of the widespread confusion surrounding crypto taxes.
When it comes to calculating taxes on their cryptocurrency activities, an overwhelming 84 percent of crypto investors are not completely confident that they know all they need to. Given a list of possible cryptocurrency situations that require paying income tax, just 3 percent got all answers correct, leaving 97 percent with at least one wrong answer. For example, a majority don’t realize they need to pay taxes when trading one type of cryptocurrency for another (58 percent) or when using cryptocurrency to buy a good or service (64 percent). This knowledge gap can lead to inaccurately filed tax returns, potentially resulting in crypto investors paying too much or too little in tax.
“Staying tax compliant has become even more challenging given the continued adoption of cryptocurrency,” said Jon Lerner, CEO and co-founder of CoinTracker. “The average CoinTracker user has crypto transactions in close to three (2.93, to be precise) exchanges or wallets, and 75 percent of users added more than one exchange or wallet in the last 12 months. Using multiple exchanges and wallets drastically increases tax complexity for crypto users. We ran this survey to better understand the most common knowledge gaps with crypto taxes. We’ll apply the lessons learned towards helping crypto users file taxes more accurately and seamlessly, thus saving them time and money.”
Other key findings from the survey include:
- Only 2 out of 54 respondents* who felt completely or mostly confident in their knowledge of crypto taxes could identify all seven situations in which they had to pay income taxes on their cryptocurrency investments.
- Two in five crypto owners (40 percent) don’t know paying taxes is required for selling cryptocurrency for fiat currency.
- Of the total respondents, nearly half (48 percent) did not know that selling or trading an NFT is a taxable event.
- 35 percent of respondents have not set money aside for their cryptocurrency capital gains taxes for 2021. Eight percent said they weren’t sure.
- 74 percent of respondents want more information on how to file crypto taxes from their exchanges.
CoinTracker enables consumers to seamlessly track their entire crypto portfolio across exchanges and wallets, helping users see their market value, investment performance, transactions, and taxes as they transact with cryptocurrency. Fresh off a $100 million Series A funding in January, CoinTracker secured exclusive partnerships with many top exchanges, wallets, and tax services, including Coinbase, OpenSea, Phantom, Blockchain.com, Bittrex, and Intuit's TurboTax. TurboTax is the first and only major online tax provider with crypto import from CoinTracker, making reporting cryptocurrency fast, easy, and straightforward.
To get started with CoinTracker, please visit www.cointracker.io today.
*Small base size: findings are directional.
About the Survey:
The CoinTracker Survey was conducted by Wakefield Research among 100 U.S. cryptocurrency investors between March 16th and March 27th, 2022, using an email invitation and a custom online survey.
Results of any sample are subject to sampling variation. The magnitude of the variation is measurable and is affected by the number of interviews and the level of the percentages expressing the results. For the interviews conducted in this particular study, the chances are 95 in 100 that a survey result does not vary, plus or minus, by more than 9.8 percentage points from the result that would be obtained if interviews had been conducted with all persons in the universe represented by the sample.
About CoinTracker:
CoinTracker is the market leader in cryptocurrency portfolio tracking and tax compliance, applying the best technology and partnerships to deliver the highest level of accuracy, simplicity and year-round value. Users collectively track over 3 percent of the entire global cryptocurrency market cap (currently north of $50 billion). Founded in 2017, CoinTracker is backed by Accel, General Catalyst, Initialized Capital, Y Combinator, 776 Ventures, and other leading investors. CoinTracker is the exclusive cryptocurrency tax partner for many of the top exchanges and tax products, including Coinbase, OpenSea, Intuit’s TurboTax, Blockchain.com, Bittrex, and Phantom. For more information, please visit https://www.cointracker.io.
