Austin Woodward, CEO of TaxBit: How to Save Money on Your Crypto Taxes

— The IRS treats cryptocurrency as property, not currency, triggering taxable events on trades, sales, spending, mining, staking, and interest earnings.

— Specific identification of cryptocurrency lots allows taxpayers to optimize tax liability by selecting high-cost-basis holdings to sell first, subject to meeting IRS record-keeping criteria.

— Wash sale rules do not currently apply to crypto (only to securities), creating significant tax-loss harvesting opportunities unavailable in traditional markets.

— Mining and staking are treated as ordinary income at fair market value on receipt, then create a second taxable event (capital gain/loss) when the crypto is later disposed of.

— Many exchanges incorrectly issue 1099-K forms (treating crypto as business income) rather than proper 1099-B forms (capital gains on property), leading to hundreds of automated IRS audits of users.

— TaxBit automates tax compliance by connecting to exchange APIs, tracking cost basis across transactions, and enabling real-time visibility into tax liability throughout the year.

— Answer "yes" to the IRS's 2019 cryptocurrency transaction question on your tax return; answering "no" creates an intentional record that can trigger penalties beyond monetary fines if audited.

— Connect all your cryptocurrency exchange and wallet accounts to tax software like TaxBit rather than relying on manual spreadsheets or accountants alone; proper tracking of cost basis, transfers, and specific identification can save thousands or even unlock refunds.

— Monitor your tax position year-round using predictive tools to harvest losses opportunistically, particularly before year-end, since crypto's volatility makes loss harvesting much more viable than in traditional equity markets.