Being one of the most famous exchanges in the crypto world, Coinbase has ruled the US market with more than 50 million users. The main aim of Coinbase was to give users an app that is extremely easy to use, unlike other exchanges which it certainly managed to do till now.
While it has immaculate security and a consistent record, the organization has seen its reasonable contentions throughout recent years. The organization exceeded the records of 13,000 clients with somewhere around $20,000 in any one exchange type somewhere in the range of 2013 and 2015 to the IRS, and all the more as of late, started submitting 1099-Ks to the IRS for high-esteem clients.
How about we investigate what Coinbase clients should be aware of Coinbase tax documents and forms:
Coinbase Tax Documents
With the help of the reports offered by Coinbase, it will be helpful for users to report the taxes in the future. There is a CSV file in the Coinbase transaction history where all of your purchases, selling activity, any investment activity, and transfer activities are found.
The purpose of the spiral is to help you figure out your profits, losses, and income.
How To Download Tax Documents From Coinbase?
Well, downloading tax documents from Coinbase is not as difficult as it seems. All you need to know is how to use the account, and that’s it. Let’s understand the process using which you can download tax documents from Coinbase:
Steps to Download Tax Documents from Coinbase:
- The first step you need to do is open the browser and visit the coinbase website
- Enter your credentials and login
- Once you are logged in, you will come across the main dashboard screen
- Look at the top! There is a tools option in the menu
- You need to select that where you will find different options.
- Out of all the options, you need to choose Tax Center and Reports
- Choose Reports to generate the account statements
- Clicking on the tax centre will head you to a screen where you can find your transaction history entirely.
Also Read: Does Coinbase Report To IRS?
What To Do With Coinbase Tax Documents?
Many people perceive that reporting in Crypto tax is just related to profits and losses. The case is entirely different. Regular income is used by Coinbase. Now the question arises! Where will the income get reported? Well, it completely relies on the employment status you have:
Self Employed: A self-employed person is called an independent freelancer consultant or a business owner. If you are self-employed and you use cryptocurrency for the business itself, schedule C is where your Coinbase 1099-MISC will be reported.
Not self-employed: If you are a person who is not self-employed and mainly file 1040 form, then schedule 1 is the place where your data will be filed as other income.
Apart from this, are you using cryptocurrency for any additional thing like purchasing something with Crypto or trading? In this case, Coinbase 1099-MISC will not be able to include all of your transactions in the report.
What Is The Purpose Of Coinbase 1099 Tax Forms?
1099 data reports have been around for quite a while. There are various kinds of 1099’s in presence today (1099-K, 1099-MISC, 1099-B, 1099-DIV, and so on).
All of them fill a similar general need: to give data to the Internal Revenue Service (IRS) about particular sorts of pay from non-work-related sources. Put another way, 1099’s are conveyed to provide details regarding the pay you got that wasn’t from a business.
1099’s give both you and the IRS records of your non-business pay. Assuming the IRS gets a 1099 enumerating pay that you didn’t cover on your assessment form, you will be retroactively charged punishments and interest on your expense installment.
Also Read: How to Change Phone Number / Email Address on Coinbase?
Final Words
Coinbase is the most well-known crypto trade in the United States. The IRS has been getting serious about underreported digital currency gains throughout recent years.
Coinbase clients ought to know what the trade is answering to burden specialists and how to precisely report their capital additions or misfortunes to keep away from any likely issues.
