In brief

  • Crypto exchange Gemini announced that it will integrate TaxBit's Tax Center Suite.
  • The tool enables users to automate their crypto tax reporting.
  • Traders will be able to download tax reports in an IRS-compliant format.

Calculating your crypto-related taxes can be a challenge, with a myriad of underlying nuances to catch out the unwary. Now, crypto exchange Gemini has partnered with crypto tax firm TaxBit to integrate its Tax Center Suite, enabling traders to simplify and automate their tax reporting.

"TaxBit's software automates the calculations required for crypto tax reporting, helping reduce the pain point of crypto tax for our users. Investors will also be able to see real-time tax implications of any trades they make on Gemini," said Tyler Winklevoss, CEO of Gemini (Winklevoss Capital is also an investor in TaxBit).

Per the announcement, the integration of TaxBit’s tools will help Gemini users to make their cryptocurrency tax reporting “simple and easy.” After the implementation is complete, customers in the United States will be able to automatically compile already completed tax reports in the format required by the US Internal Revenue Service (IRS).

Additionally, the new tools will allow users to monitor and lower their tax liability or potentially increase their tax refunds, the companies noted.

"We are excited to partner with Gemini in order to bring industry leading tax technology to Gemini's platform. Gemini is making crypto taxes, something that historically has been viewed as intimidating and complex, simple," added TaxBit CEO Austin Woodward.

In March, TaxBit also partnered with crypto trading platform Uphold to help traders with their taxes.

IRS gets serious about crypto tax

Gemini’s move is a timely one, with the IRS taking a keen interest in crypto users. This year, the agency has placed a question about crypto transactions on Page 1 of the 2020 return, as well as sending out warning letters to suspected crypto tax evaders. It’s also spent $250,000 on analytics tools to trace privacy coins such as Monero.

And crypto tax questions are only going to get more challenging, as innovations such as decentralized finance (DeFi) become more prevalent, with their attendant tax complications.

As Decrypt reported, Protocol Labs general council member Marvin Ammori has previously stated that “doing your taxes for crypto is the worst nightmare” in his testimony during a US congressional meeting.

Thanks to Gemini and TaxBit, some crypto holders can rest easy, at least.