Crypto Tax Professional Help: 5 Steps to Take If You Haven’t Filed in Years

If you have been putting off your crypto taxes for some time and years have gone by, let’s not panic just yet. It happens more often than you’d expect, especially when you’ve started small with a few trades when it was not that complicated, and suddenly, there’s a lot of crypto activity waiting to be reconciled and filed for taxing. Whether it was unintentional or not, missing crypto tax filing leads to penalties and even potential criminal charges. Therefore, it’s advisable to take these steps with reliable crypto tax professional help so you can mitigate risk as soon as possible.

1. Key Takeaways

• If you’ve missed crypto taxes for years, don’t rush to file. First understand your full activity and what you actually owe.
• Start by gathering records you have, then clean and verify them before calculating anything to avoid costly mistakes.
• Getting a crypto tax professional involved early helps fix gaps and reduces the risk of penalties or audits later.

2. Step 1: Assess Your Tax Situation

Before doing anything else, get clear on where you stand.

If you’ve bought, sold, swapped, or earned crypto, these activities are taxable. Since the Internal Revenue Service (IRS) treats crypto as property, any crypto transactions like selling or swapping tokens trigger capital gains, while rewards like staking are generally treated as income.

Even if you didn’t file taxes last year, these obligations still exist. The goal now is not to panic but to organize and correct with an expert crypto tax accountant.

3. Step 2: Gather All Available Crypto Records

If you don’t have a crypto CPA to help just yet, that’s alright. Begin with whatever you can access. Look for exchange exports, wallet histories, and transaction records you still have. With crypto tax professional help, you’ll be able to reconcile crypto transactions so there aren’t any more gaps. The more you wait, the more that progress gets delayed.

4. Step 3: Identify What’s Taxable and What’s Not

Every crypto transaction isn’t a taxable event. This is where most investors make mistakes. Ideally, a crypto accountant can classify your crypto activities so no errors occur. However, if you are still unable to get professional help, what you mainly need to know is that transfers between your own wallets are not taxable, although selling crypto, swapping tokens, or earning rewards usually are.

The issue is that these transactions can look quite similar in raw data. For example, a wallet transfer might be incorrectly recorded as a sale, which creates a gain that never actually happened. This is where the expertise of a crypto tax accountant can be extremely useful.

5. Step 4: Check Your Numbers Before Filing

Before you calculate anything, you need to make sure your data actually makes sense since most transactions are disconnected due to the use of multiple wallets or exchanges. To elaborate, you might see a withdrawal from one platform but no matching deposit on another. This can look like a sale to software even though it was just a transfer.

Your crypto tax professional will check your cost basis and verify transactions before calculations are finalized in order to prevent such errors caused by crypto tax software. Just because you are late to file taxes doesn’t mean that you can rush this step. That’s how most people end up with incorrect filings.

6. Step 5: Get Crypto Tax Professional Help

Instead of guessing or following the above steps incorrectly, getting professional support to amend past returns is the most effective way to avoid carrying errors in your tax report. Most crypto traders who attempt to file taxes via crypto tax software generate reports, but they’re mostly missing data.

Without a crypto tax professional helping you, it’s next to impossible to explain these inconsistencies at an audit. If you’d like to fix things properly with precise crypto tax reports, a cryptocurrency accountant should reconcile your transactions.

Book a free consultation with Onchain Accounting and get clear, personalized guidance on your crypto taxes today.