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Austin Woodward
#631 The Leading Tax and Accounting Bitcoin Software w/ Austin Woodward
- Austin Woodward, co-founder and CEO of TaxBit, has built a $1.3+ billion cryptocurrency tax and accounting software company in three years and just raised $130 million from IVP, Insight Partners, and Tiger Global. - TaxBit partnered with the IRS to help the agency understand cryptocurrency as an asset class and prepare for information reporting (1099) requirements anticipated in infrastructure legislation. - The company expanded from tax filing into real-time accounting automation, allowing financial institutions and corporations to close books in compliance with GAAP and IFRS standards without manual journal entries. - TaxBit uses a B2B2C strategy, partnering with platforms like Uphold and BlockFi rather than pursuing direct-to-consumer sales; the company has grown with only a two-person sales team generating entirely inbound demand. - Tax loss harvesting and forward-looking tax planning are key features—users can see real-time tax positions across assets (equities, commodities, crypto) to make strategic trades and plan ahead rather than facing surprise tax bills. - The company is tripling headcount to 200 employees by year-end, opening offices in Seattle and the UK, and plans to expand into New York (go-to-market) and Washington D.C. (public sector) to serve consumers, enterprises, and governments globally.
#582: Austin Woodward on Building Tax Infrastructure in Bitcoin
- Taxbit raised $100 million Series A from Tiger Global and Paradigm to scale its cryptocurrency tax software and accounting platform across retail, enterprise, and government markets. - The IRS has selected Taxbit as an official cryptocurrency tax software provider to audit taxpayer accuracy and compliance with tax filings. - Tax loss harvesting allows investors to sell positions at a loss, offset capital gains, accumulate losses over time, and repurchase correlated assets to legally minimize tax liability without wash-sale restrictions in crypto (yet). - Taxbit is democratizing tax optimization strategies previously available only to the ultra-wealthy by integrating native tax-loss harvesting tools directly into exchange and wallet platforms. - El Salvador's Bitcoin legal tender adoption does not change U.S. tax treatment of Bitcoin (still classified as property, not currency), but signals growing institutional and government adoption globally. - Regulatory compliance and the closing of the cryptocurrency tax gap are essential for mainstream adoption; the IRS is issuing 1099s and conducting subpoenas to enforce reporting obligations.
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.