- Cryptocurrency tax calculation got a little more respectable thanks to EY CryptoPrep, EY’s new crypto tax calculation software
- The software integrates EY’s commercial client methodology and the latest guidance from the IRS
- Using EY CryptoPrep doesn’t make you immune from an IRS investigation
EY, the auditors currently entangled in the QuadrigaCX affair, have expanded their cryptocurrency association by creating EY CryptoPrep, a piece of software that aims to make your crypto tax calculations painless and easy. EY CryptoPrep uses your cryptocurrency exchange transactions alongside any additional trades you have to create an 8949 tax report for you to submit at the end of the tax year, taking the pressure away from you and your calculator.
Established Name Boosts Cryptocurrency Tax Options
EY boasts that CrytoPrep uses the same methodology that the company uses with its commercial clients and integrates the latest IRS guidance, which will be a relief to those who have been left scratching their heads by the ever changing guidelines. The company also says that EY CryptoPrep will only ask for minimal identifying information throughout the process, which will be good news to those who like to retain at least some elements of their crypto privacy. However, considering that the software needs paying for and they will need certain information to fill out your 8494 properly, there won’t be much chance of keeping anything important withheld.
IRS Could Still Come After You
Calculating cryptocurrency tax is notoriously difficult, with an almost impossible burden of proof put on traders by the IRS at times. Numerous crypto tax aids have sprung up in recent years, from use-at-home software packages to companies offering crypto-specific tax services, but the truth remains that there is still an element of shooting at a moving target about crypto taxes.
The presence of an established firm like EY in the space changes the cryptocurrency tax game a little, with traders more likely to trust their output than other unknown names. However, the fact remains that EY CryptoPrep can only work with what data it is given, and if the IRS thinks that you’re leaving out earnings then there’ll be a letter through your door no matter what software you use.