Photo of Professionals at Bomar Law Firm

Guiding You Through The Legal Process

Photo of Professionals at Bomar Law Firm

Risks of failing to file taxes on cryptocurrency

On Behalf of | Jun 28, 2022 | Income Taxes

Digital currencies continue to rise in popularity and many individuals might feel inclined to invest in similar opportunities. While cryptocurrencies may differ from other types of currency in various ways, many of the same rules may apply when pertaining to filing taxes. Individuals in Georgia who own cryptocurrency might find it helpful to know the possible risks of failing to include such information on tax returns and the steps to take should similar issues lead to issues with tax debts. 

Capital gains and possible repercussions 

Experts indicate that capital gains on cryptocurrency transactions may be taxable transactions and including the items on tax returns could help stave off undesirable results. Tax rates on cryptocurrency may vary depending on how long one owns such assets and the frequency of digital exchanges. Even with the anonymous nature of many cryptocurrencies, it might not be in one’s best interests to assume that the IRS will not be able to locate such information.  

Failing to file taxes on cryptocurrency transactions or trying to hide such assets may prompt a variety of repercussions that could have a lingering impact on one’s financial future. While in many cases, this may lead to tax debts with extensive penalties and high-interest rates, the situation could prove much worse. Experts indicate that failure to report taxable cryptocurrency transactions could even lead to criminal charges. 

Addressing one’s options 

While including cryptocurrency transactions on tax returns may be vital, the average person might not always know how best to handle such complex endeavors. Those who face tax-related issues under similar scenarios and remain uncertain of their options might benefit from consulting with legal counsel for advice on the best course of action to take. An attorney in Georgia can evaluate a client’s situation thoroughly and assist in creating a strategy to help protect his or her future and seek any relief required through the proper outlets.