Ernst & Young (EY) has introduced a new application that helps U.S. cryptocurrency traders calculate and file their taxes with ease.
The EY Cryptoprep app, a Software as a Service (SaaS) web-based crypto tax engine, helps users calculate crypto-related gains and losses that have to be reported on Form 8949, a form used to report sales and exchanges of capital assets.
According to a June 18 statement from EY, one of the four largest accounting companies in the world, the engine offers step-by-step guidance through the crypto tax process. Users of the application, which supports major digital assets, can connect it to various exchanges to collect data about all their transactions.
EY Cryptoprep will then aggregate and reconcile the data before applying the relevant tax rules to produce an account of crypto capital gains or losses. Afterward, a completed Form 8949 for all applicable years is issued. The app also enables users to submit amended returns for past tax liabilities, not only the current year.
Ernst & Young vice-chairperson for tax services Marna Ricker claimed the firm is responding to increasing demand.
“Our clients increasingly hold and trade crypto assets, creating the need for an innovative solution to address the evolving complexity around filing crypto taxes. The EY Foundry, our internal corporate venturing unit, created EY Cryptoprep to modernize the crypto tax accounting process,” said Ricker.
This is not the first offering from EY targeting digital financial assets. The firm unveiled an auditing software for cryptocurrencies called EY Blockchain in April 2018. EY Crypto-Asset Accounting and Tax, a tool that facilitates accounting and tax calculations for crypto transactions, targeted at both institutional and retail investors, was launched last year.
“EY Cryptoprep expands our innovative portfolio of successful new digital businesses,” said Chirag Patel, Ernst & Young foundry leader, in the statement.
The Internal Revenue Service deadline for tax returns is July 15, 2020.
What do you think about the EY crypto tax calculation tool? Let us know in the comments section below.
Image Credits: Shutterstock, Pixabay, Wiki Commons, EY
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