TaxBit Raises $5 Million to Help Automate Crypto Tax Process

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TaxBit, the automated crypto tax calculation tool, has announced that it has raised $5 million in investment as it eyes expansion of its services. The planned expansion comes on the back of a year that saw the Inland Revenue Service (IRS) tighten the noose around crypto traders, with some, such as NODE40 Balance CEO Sean Ryan, claiming that the rules are overly complicated for everyday users to understand.

TaxBit Aiming to Make Tax Less Painful

TaxBit, which offers cryptocurrency tax automation software targeted for crypto users, exchanges, and merchants, attracted investment from the likes of Dragonfly Capital Partners and Winklevoss Capital in the latest round, with some investors coming back for more having invested first time round. Founded by CPAs, tax attorneys, and software developers, TaxBit is one of a growing number of companies providing software solutions for cryptocurrency users that aims to take the pain out of calculating tax on crypto earnings.

Seeing that there is “a shift in how Americans are beginning to look at cryptocurrency in regard to taxes and government regulations”, the firm has decided to expand their offerings, and they couldn’t have chosen a better time – crypto tax authorities around the world are clamping down on users, helped by regulations such as AMLD5, which leaves fewer and fewer opportunities for non-tax payers to slip through the net.

The Tax Man He Comin’

Winklevoss Capital Partner, Sterling Witzke, echoed the sentiment that crypto tax is a minefield at present, stating that, “Navigating cryptocurrency tax laws is a byzantine process.” The fact is that, with the increase in popularity of cryptocurrency and the increasing ability for the IRS to look into individuals’ affairs, paying tax on earnings is something that is best factored in at source rather than avoided in the hope it won’t get you, and software such as TaxBit and NODE40 Balance are great options to make the process less painful and, crucially, more accurate.