What Do You Need To Look For When Hiring a Crypto Accountant
Let's start with a basic concept: crypto is taxable and the Taxman is waiting! The rules around crypto taxes are new and accountants around the world are playing catch up.
So what can you do to ensure your accountant is up to scratch in terms of cryptocurrency accounting? The following 4 essential questions are your starting point.
1) Does your accountant have crypto clients? Of course, everyone has to start somewhere, but you don’t want to be the guinea pig your accountant uses to gain their experience. So, the first thing you need to know is, does your accountant deal with crypto tax already? Ask your accountant what percentage of their client base are crypto investors? The more complicated your level of trade is, the higher that percentage should be.
Cryptotax Accountants was specifically formed to serve the needs of crypto investors, who account for 100% of our client base. We have a network of expert accountants who are heavily involved and invested personally in this space. With over 20 years experience as qualified accountants, we now specialise in crypto tax to solely focus on meeting the demand from our crypto clients.
2) Does your accountant understand crypto income? Any crypto accountant worth their job description will know that crypto can be taxed as either capital gains or as income tax. If your accountant is not able to explain how crypto is taxed at these two basic levels, then move on. If you’re dealing with mining, staking, DeFi interest and airdrops, focus on your accountant’s understanding of crypto Income Tax. Whilst both capital gains and income tax have their fair share of complexities, income tax applies to most of the newer (and trickier) transactions and projects, for example:
coins that pay out dividends
master node operators
Cryptotax Accountants will be able to review your transactions and ascertain whether they fall under capital gains tax or income tax. We have experience of dealing with the newer transactions and projects as outlined above.
3) Does your accountant use crypto tax software? Crypto tax is complicated for many reasons, the first being the sheer amount of data and admin required to generate accurate tax totals. It's advisable that your accountant uses crypto tax software to import all your crypto accounts, from both the exchanges you trade on, and the wallets you store your crypto in. Crypto tax calculators are also essential for working out market value, and converting your trades (both crypto and fiat) into your local currency. Here at Cryptotax Accountants, we use software and tools like Koinly and Crypto Tax Calculator to accurately generate a tax report that shows your capital gains, loss income, and expenses for the tax year.
4) Does your accountant trade crypto? Going after accountants with cryptocurrency experience might narrow the field, but it’s vital that your accountant understands the space. These are the sorts of experts you’ll want, especially as the cryptocurrency market is continually evolving at lightning speed and crypto tax rules are so new that few accountants are even aware of them!
We ourselves are investors in a range of cryptocurrencies, and therefore fully understand the market; we are just as excited as our clients at the scope and potential within this new digital world!
Cryptotax Accountants are the leading cryptotax experts in the West Midlands in the exciting and innovative world of cryptocurrency, so you can rest assured you are in safe hands!