Accountant for US Expats That Have Coinbase Income and Accounts
U.S. expats who have Coinbase income and accounts need to properly report their cryptocurrency to the IRS. A skilled accountant can help such expats avoid unnecessary fines and penalties once tax season rolls around.
Having a Coinbase income and accounts as a U.S. expat means that you receive and hold your foreign earned income as cryptocurrency, or earn income on investments made through Coinbase. When it comes to reporting this, things can get confusing. U.S. expats with Coinbase incomes and accounts may have to complete IRS Form 8938 and FinCEN Form 114, depending on the state of their foreign finances. As laws change regarding cryptocurrency, it benefits U.S. expats to have an experienced accountant by their side. If not, expats may face penalties for improperly reporting their Coinbase income and accounts.
US Tax Help wants to make tax season easy for expats, especially if cryptocurrency is involved. Our team can help you properly report your Coinbase income and accounts and keep you updated on any filing requirement changes. To learn more about the CPAs for American expatriates at US Tax Help, call today at (541) 362-9127.
Explaining What It Means for US Expats to Have Coinbase Income and Accounts
Cryptocurrency is an ever-evolving subject. U.S. expats working abroad may receive their income through Coinbase, an online platform for holding and selling cryptocurrency. If you hold crypto in a Coinbase account as a U.S. expat or are interested in doing so, there are a few things you should know.
First, cryptocurrency is currently considered a financial asset in the eyes of the IRS. While it is not seen as cold hard cash, that does not mean you can receive or sell crypto tax-free. If you receive your foreign income in the form of crypto paid into a Coinbase account, you are still liable for paying taxes on that income.
Suppose you invest in crypto through a Coinbase account. That means, once you sell the cryptocurrency in your Coinbase account, you may have to pay capital gains tax if the profits from the sale are held for over a year. Expats can report capital gains taxes from Coinbase sales on their annual tax returns using Schedule D.
As the IRS expands its rules on cryptocurrencies, it is important to have an experienced accountant in your corner, like the CPAs at US Tax Help. If you have not been declaring your crypto income as income on your annual tax return, it is wise to get in the habit. If you do not, you may face fines and penalties should reporting requirements change.
Filing Requirements for US Expats That Have Coinbase Income and Accounts
If you have a Coinbase income or hold your cryptocurrency in a foreign Coinbase account, you must report it if you are an American expat. As long as expats retain their U.S. citizenship, they are beholden to the IRS. Learning the filing requirements can help you avoid fines as a U.S. expat with a Coinbase income and accounts.
IRS Form 8938
IRS Form 8938 is a rundown of your foreign financial assets. These assets include things like bank accounts and cryptocurrency held in a foreign Coinbase account. When it comes to IRS Form 8938, U.S. expats must report their total foreign financial assets if they exceed a certain amount. If you have more than $200,000 in foreign financial assets on the final day of the tax year or more than $300,000 at any point during the tax year, you will have to file IRS Form 8938. The threshold is double that for persons filing jointly.
Any foreign holdings can count toward that threshold, including Coinbase accounts. If your income comes in the form of cryptocurrency, your account’s value will grow, potentially putting you over the reporting threshold. However, Form 8938 does not ask you to report the income when it comes in; it only deals with the total value of the holdings, in whatever form they exist (e.g., cash, crypto, or other investments).
When first getting into cryptocurrency or first living overseas, you may not be aware of such filing requirements. That is why it is crucial to enlist the guidance of an experienced CPA, like those at US Tax Help, to ensure that you are correctly reporting the crypto in your Coinbase accounts.
FinCEN Form 114
A Report of Foreign Bank and Financial Accounts, commonly known as FBAR, can be necessary for situations where U.S. expats have a Coinbase income and accounts. U.S. expats have to file Form 114 with the Financial Crimes Enforcement Network (FinCEN) to make this report. Generally, foreign accounts over $10,000 need to be reported. It is likely that FinCEN will require crypto accounts to be reported as well, meaning that Coinbase wallets over $10,000 should likely be reported with an FBAR. Talk to a tax CPA for help with your specific reporting requirements.
It is important to note that filing this form does not affect taxes. FinCEN Form 114 is for informational purposes only.
Benefits of Having an Accountant for US Expats That Have Coinbase Income and Accounts
If you are a U.S. expat with a Coinbase income or accounts, you can benefit from also having a skilled accountant by your side. As laws evolve surrounding cryptocurrency, you may be unaware of new filing requirements. Even now, you may not know how to report your cryptocurrency holdings in your Coinbase account properly. An accountant can prevent you from incurring fines for improperly reporting your Coinbase income and accounts.
American citizens living overseas must report their foreign earned income to the IRS. But how do you do that if your income is received as cryptocurrency? That can get confusing quickly, which is why it benefits you to have a skilled CPA, like the accountants for U.S. expats at US Tax Help. Otherwise, you may incur serious fines and penalties as a result.
Failure to report your foreign-held or -acquired cryptocurrency even if it is not part of your foreign income can result in fines. If you hold your foreign crypto in a Coinbase account and fail to file IRS Form 8938, you can be subject to serious financial penalties from the IRS.
U.S. expats can be unaware of the confusing laws surrounding cryptocurrency. To ensure protection from unnecessary fines, consider asking an accountant for help filing your annual tax return. Although U.S. expats are required to file their American taxes, the rules can differ since their finances are concentrated in another country. That alone is confusing enough, but layering a Coinbase income and accounts on top can quickly become overwhelming if you do not have help.
Our CPAs Can Help US Expats That Have Coinbase Income and Accounts
If you are an expat with a Coinbase income and accounts, you need to know how to report your foreign cryptocurrency to avoid penalties properly. For assistance, call the CPAs for American expatriates at US Tax Help today at (541) 362-9127.