Finding a reliable crypto tax accountant near you is crucial when taking on the unique challenges cryptocurrency taxes present. Crypto transactions, including trades, staking, and NFTs, trigger different taxable events that require specialized knowledge and reporting to navigate.
Working with an expert in crypto accounting who understands blockchain, DeFi, and other digital assets helps you avoid costly mistakes. A specialized crypto CPA will suggest strategies to minimize your tax bill while keeping you compliant with IRS regulations.
Why You Need a Specialist for Crypto Taxes
Working with an experienced crypto CPA is a must for traders and investors, as crypto taxation is complex. Regular tax professionals or accounting professionals are a great choice for individuals and businesses with conventional portfolios. However, they’re unlikely to have the necessary expertise in activities like crypto trading, mining, staking, NFTs, and airdrops.
Crypto-specific IRS guidelines are constantly evolving and require specialized knowledge to negotiate. Misreporting can trigger audits or penalties with serious consequences.
Understanding the ins and outs of topics like DeFi taxes and DAO taxes isn’t only a question of remaining compliant. Crypto tax professionals will also guide you through strategies to minimize your tax bill and advise you on short- and long-term investment decisions. They can also advise on other strategic decisions, for example, the impact of moving your activities to crypto-friendly states.
What to Look for in a Cryptocurrency Tax Accountant
Choosing an expert in crypto tax preparation is a significant decision for the 17% of the U.S. population who have ever invested in, traded, or used crypto. Look for the following:
- Proven experience in handling digital assets: Your CPA must demonstrate a clear understanding of crypto taxation and compliance. Blockchain and DeFi experience is also highly recommended, particularly for crypto investors with diversified portfolios.
- Filing IRS forms: Experience with different crypto tax forms and knowledge about how to file them successfully.
- Familiarity with local and international tax laws: Understanding U.S. crypto tax implications will be enough for some traders. However, knowledge on how crypto fits into IFRS standards as well as GAAP is a great benefit for traders who are liable to pay tax in different countries.
- Excellent communication: Only work with a CPA who’s willing to explain complex topics simply and provide ongoing support. Check online reviews for insights into how different firms treat their clients and make them feel seen and heard.
- Crypto tax planning: Strategic decisions like tax-loss harvesting or setting up a tax-favorable LLC are financially transformative for many traders.
Be wary of firms that promise too much. Avoid anyone who claims to “eliminate” crypto taxes or operate offshore. Compliance must always be the number-one priority.
Choose a Crypto CPA With an Excellent Reputation
Doing your research is a crucial part of finding the perfect CPA for you. There are two key ways to get information on the firms on your shortlist and their past record with clients:
- Online reviews: The easiest and most obvious way to get an insight into a CPA is to check their online reviews. Look into their level of expertise, how they’ve helped crypto investors and traders like you, and how they communicate and work with their clients.
- Official databases: Check the official Accountancy Licensee Database and filter by CPA or firm to ensure they’re currently licensed. This database also shows non-compliance and disciplinary actions taken.
How to Find a Crypto Tax Accountant in Your Area
Many traders and investors appreciate the convenience of having a local crypto CPA. The following tips will help you narrow down your options when searching for crypto accounting services near you:
- Search for local CPA firms with crypto divisions: Not all accounting firms are CPAs or experts in crypto. Take your time to research and ascertain if local CPAs offer the level of expertise you require.
- Referrals from crypto communities: Lookfor recommendations in Discord, Reddit, or local meetups. Speak to other people who have worked with a crypto CPA and ask them for pointers.
- Professional networks like LinkedIn: A firm’s profile often gives you a good feel for the services they offer and whether they could align with your goals.
Benefits of Working With a Local Crypto CPA
A local crypto CPA offers several benefits that online firms may not be able to match. These include:
- Face-to-face meetings: This is appealing for clients who would appreciate a more personal touch or whose first language isn’t English.
- State and local expertise: Local experts understand state and local tax laws that affect you. For example, thetop accounting firms in Florida offer guidance on staying compliant with both federal and state tax filing requirements.
- Easier to find references: A local crypto CPA will have local clients who can vouch for the quality of their crypto tax services.
Questions to Ask Before Hiring a Crypto Accountant
You’ve done your research and narrowed down your options to a handful of crypto CPAs in your area. The next step is to do your due diligence and question them on what matters to you. This will help you piece together the role they’ll play and what to expect.
Ask the following questions during an initial consultation:
- What is your experience with different cryptocurrencies, DeFi protocols, and blockchain accounting?
- The best CPAs offer expertise in all aspects of the crypto world. This will help you diversify your portfolio in the future, even if you’re just starting out.
- How do you stay up-to-date with changing regulations?
- Crypto tax rules are constantly evolving. Only work with professionals who actively stay up to date with all the most recent changes.
- What are your preferred accounting methods (HIFO vs FIFO vs LIFO)?
- The accounting method your CPA uses has a significant impact on your crypto tax return.
- How much do you charge and on what basis?
- It’s important to know how much you can expect to pay for your CPA’s services. Ask them for a detailed breakdown of how much they charge for each service, and if they charge by the hour or on retainer. Ask them to demonstrate the value of their services by comparing their costs with the benefits they achieved for their clients.
- Can you provide client references?
- A reputable CPA will be delighted to share their success stories with potential clients. Be wary of firms that are unwilling to share details of current or past clients.
- What tools do you use to stay on top of transaction data?
- Modern crypto CPAs should have a full working knowledge of a range of crypto software that facilitates smooth and accurate reporting. Ask them how they use their software and the results it gives them.
FAQs
Can I file my own taxes as a crypto trader or investor?
Yes, you can file your own taxes without the help of a crypto CPA. However, this risks making mistakes that could lead to costly penalties or even an IRS audit. Taking advantage of tax-efficient strategies is also much easier with an expert at your side.
Which documents or data will my CPA need?
The more information you give your CPA, the better. Provide all transaction records from exchanges, wallets, and DeFi platforms you use, plus other relevant information like the cost basis of your cryptocurrency.
Can a crypto CPA help with international crypto taxes?
CPAs who are familiar with cross-border tax laws and different standards like GAAP and IFRS will be able to help you with international crypto transactions. This is a must for investors trading on global exchanges.
How often do crypto tax laws change?
The IRS and other global tax authorities frequently update their crypto tax guidance. Your CPA will help you stay ahead of these changes and remain compliant.
Partner With the Best for Your Crypto Needs
Finding the right crypto tax accountant makes all the difference for traders looking for smooth, compliant filing while avoiding errors that could attract IRS attention. A knowledgeable crypto CPA helps you accurately report your transactions and also identifies legitimate ways to reduce your tax burden and strengthen your long-term financial strategy.
Partnering with a trusted professional ensures peace of mind and protects your investments from unnecessary risks. Take the time to research, verify credentials, and choose a CPA who truly understands the complexities of digital assets and the rules that govern them.
