As the 2022 federal income tax filing deadline approaches, the Internal Revenue Service (IRS) — an enforcement agency of federal tax laws in the United States — released a list of reporting requirements for the general public dealing with cryptocurrencies.
Until 2021, the IRS used the term “virtual currencies” in income tax-related reporting forms updated to “digital assets.” All US citizens must answer questions about cryptocurrencies “regardless of whether they have been involved in digital asset transactions.”
The digital asset income question comes in three forms: 1040, Individual Income Tax Return; 1040-SR, United States Senior Citizens Tax Return; and 1040-NR, the US Nonresident Alien Income Tax Return, which asks:
“At any time in 2022, did you: (a) (as a reward, award, or payment for property or services); or (b) sell, trade, gift or otherwise dispose of a digital asset (or financial interest in a digital asset)?”
While all taxpayers must answer yes or no to the above question, the IRS has identified nine instances where “yes” must be checked, as shown below:
IRS Checklist of Statements Related to Cryptocurrency. Source: irs.gov
The above recommendations boil down to receiving, earning, transferring or selling cryptocurrencies for any monetary benefit, including mining and staking. In addition to ticking “yes,” eligible taxpayers must report all income related to their digital asset transactions.
Revised 2022 Instructions for Form 1040 (and 1040-SR). Source: irs.gov
The only cases where one can tick “no” in the submission is if they just held the crypto assets, transferred assets between wallets they own, or bought cryptocurrencies against fiat currencies.
Related: US authorities will step up scrutiny of the crypto industry in 2023
A bill recently introduced during the first session of the Arizona State Senate in 2023 proposed that Arizona residents vote on amending the state’s constitution regarding property taxes.
As Cointelegraph reported, the SCR 1007 bill was read twice on Jan. 19 and Jan. 23 as part of the state Senate calendar.