THELOGICALINDIAN - The US Internal Revenue Service IRS has committed to arise bottomward on bitcoin users that may accept been artifice advantageous taxes However there is still time to accomplish accommodating donations to your admired charities and thereby accord a little beneath tothe tax man
Also read: IRS Demands Coinbase Records In Surprise Tax Probe
Year-End Tax Planning
For federal tax purposes, the IRS treats bitcoin as property, not currency. Taxpayers are 
required to address all bitcoin-related income, whether it be from wages, gifts, mining or investments. While some bitcoin assets may go undetected by the IRS, exchanges such as Coinbase are appropriate to address all bitcoin affairs to the agency.
Tax planning at anniversary can save taxpayers a abundant bulk of money. Among the assorted methods to abate tax obligations is to accomplish tax-deductible donations to charities. Many nonprofits now acquire bitcoin donations such as BitGive, and United Way, Save the Children, and Greenpeace. However, afore donating, accomplish abiding that the alignment is an IRS-approved nonprofit. Otherwise, the bureau can abandoned your tax answer and bang you with penalties as able-bodied as the taxes owed.
Bitcoins Held Long-Term: Maximum Deductions
Bitcoins captivated over a year are advised abiding backing by the IRS. Tax advocate Elizabeth Prehn with Moskowitz LLP explained on Virtual Currency Today that “Bitcoins captivated for over a year can be donated anon to alms after accepting to pay any basic assets tax.” In addition, she said:
With bitcoin amount at its best aerial recently, tax deductions could make a aberration for your all-embracing tax strategy.
Bitcoins Held Short-Term
Bitcoins captivated for beneath than a year are advised concise backing by the IRS. Taxpayers cannot address off the abounding bazaar amount of anniversary bitcoin in this case.
If concise captivated bitcoins are donated anon to charities, “only the bottom of their cost basis or their present value can be deducted,” Prehn said. For example, bitcoiners who purchased bitcoins in January at $450 may be able to alone address off that amount, rather than the accepted amount of over $950 at columnist time.
For those who appetite to accord bitcoins captivated short-term, Prehn suggested:
Of course, in best cases, not affairs your bitcoins at all may be the best advantage to abstain advantageous the IRS in general.
Disclaimer: This commodity is for advisory purpose alone and should not be acclimated a a backup for able tax advice.
Are you planning to accord some bitcoins to charities for tax purposes? Let us apperceive in the comments area below.
Images address of Shutterstock, IRS, Moskowitz LLP
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