an Opportunity for Crypto Tax Planning

After many countries around the world such as the United States, the United Kingdom, France, and Portugal published their own cryptocurrency tax guidelines this year, it is only reasonable they will expect to see an increase in crypto tax filing.

They may even follow suit with the U.S. Internal Revenue Service and begin their own crypto tax compliance campaign.

The recent drop in Bitcoin price presents traders with a great opportunity to reduce tax liabilities accumulated since January 2019.Many people don't know it, but cryptocurrency tax liability can be significantly reduced by a recently developed practice called crypto tax planning.

If you have made profits from crypto trading since the beginning of this year, and have some losses now that the price has fallen, you can offset this loss and reduce your tax liability.

This tax planning method calls for the use of specific identification, a common way to calculate and plan taxes in many countries.

You may benefit from tax planning based on the specific identification method even if you did not accumulate crypto activity profits this year and instead incurred capital losses.

As the tax season of many countries begins in two months, there is one month left to plan your crypto tax liability for this current year.

It is advisable to consult a local crypto tax professional.

For maximum accuracy on your tax planning, you can use a crypto tax platform that will check all of your crypto addresses and recommend which one to use.

Or Lokay Cohen is a vice president at Bittax, a crypto tax calculation platform.