Tax season is upon us, and if you’ve been using Voyager to buy, sell, or earn interest on crypto, you might be wondering how it all shakes out on your tax return. Don’t worry, this isn’t rocket science – but there are a few key things to keep in mind specifically for Voyager crypto taxes users in the US.
The IRS sees crypto as property, so any transactions involving buying, selling, or trading them can have tax implications. This applies to Voyager too. Here’s a breakdown of the most common Voyager crypto tax scenarios:
- Buying and Selling Crypto: Imagine you bought Bitcoin on Voyager at a low price, then later sold it for a higher price – that’s a capital gain! The IRS wants a slice of that sweet profit, taxing it at the short-term (less than a year) or long-term (more than a year) capital gains rate depending on how long you held the crypto.
- Earning Interest on Crypto: Voyager offers a cool feature where you can earn interest on certain crypto holdings. This interest is considered income by the IRS, so you’ll need to report it on your tax return. Luckily, Voyager should send you a 1099 form if you earned over $600 in interest during the year.
- Voyager Bankruptcy and Taxes: Things got a bit bumpy with the Voyager bankruptcy last year. If you were one of the users who received a partial return of your assets, the tax implications depend on how it happened. If you simply got back a smaller amount of the same crypto, that’s generally not a taxable event. However, if your crypto was liquidated by Voyager to return some value, that could trigger a capital gain or loss depending on the sale price.
What is voyager crypto?
Voyager wasn’t actually a cryptocurrency itself, but rather a centralized cryptocurrency exchange (CEX). These platforms act like middlemen, allowing users to buy, sell, and trade various cryptocurrencies in a user-friendly way.
Imagine Voyager as a one-stop shop for your crypto needs. You could link your bank account, deposit funds, and then use those funds to purchase Bitcoin, Ethereum, or other supported cryptocurrencies. Voyager also offered features like:
- Interest on holdings: You could earn interest on certain cryptocurrencies you held within your Voyager account.
- Trading: Buy and sell different cryptocurrencies with ease, directly through the Voyager app.
- Rewards program: Voyager’s VGX token provided users with benefits like lower trading fees and increased interest earned.
Voyager tax forms?
Unlike traditional brokerages, Voyager doesn’t provide comprehensive tax forms for your crypto transactions. This is because they can’t account for activities happening outside their platform.
However, there are still ways to track down the information you need for tax reporting:
- Download your transaction history: Voyager allows users to download a complete record of their transactions within the platform. This file will list your crypto buys, sells, trades, and any interest earned.
- Crypto tax software: Several software programs specialize in helping users track and report crypto taxes. These programs can connect to Voyager (and other exchanges you use) and import your transaction history. The software then analyzes the data and generates tax reports you can use when filing your return.
Here are some popular options to consider:
These programs typically offer free trials or basic functionality, with paid plans for more advanced features.
How to report your Voyager taxes?
Reporting your Voyager taxes involves gathering information, potentially using crypto tax software, and filling out the relevant sections of your tax return. Here’s a breakdown of the steps:
- Gather Your Voyager Transaction History:
Log in to your Voyager account and locate the option to download your complete transaction history. This will be a CSV file containing details of all your crypto buys, sells, trades, and interest earned. - Consider Using Crypto Tax Software (Optional):
While not mandatory, crypto tax software can significantly simplify the process. These programs connect to Voyager (and other exchanges you use) and import your transaction data. They then categorize your transactions, calculate capital gains and losses, and generate tax reports you can use for filing. Popular options include Koinly, CoinLedger, and ZenLedger. - Identify Taxable Events:
With your transaction history or tax reports (if using software), identify transactions that might trigger a tax obligation. This includes:
- Selling crypto for a profit: This generates a capital gain and is taxable.
- Trading crypto: Every time you trade one crypto for another, it’s considered a taxable event.
- Earning interest on crypto: Interest earned through Voyager’s program is considered income and needs to be reported on your tax return (Voyager may send a 1099 form if you earned over $600).
- Filling Out Your Tax Return:
The specific forms you need will depend on your overall tax situation. However, for Voyager crypto taxes, you’ll likely use:
- Form 8949: This form details your capital gains and losses from crypto sales and trades.
- Schedule D: This schedule summarizes your total capital gains and losses reported on Form 8949.
- Schedule B (if applicable): If you earned over $600 in interest from Voyager, you’ll report it as income on Schedule B.
CoinTracking Full Service: A Safety Net for Your Voyager Crypto Taxes
The different types of Voyager crypto taxes and how to navigate reporting them. But what if you crave an extra layer of confidence when filing? Here’s where CoinTracking Full Service comes in, specifically designed for US users.
What is CoinTracking Full Service?
CoinTracking offers a service that pairs you with a crypto tax expert from Polygon Advisory Group, a leading US crypto tax firm. These experts can review your CoinTracking account, which ideally holds your downloaded Voyager transaction history. Think of it as a double-check for your crypto tax calculations.
What benefits does CoinTracking Full Service offer?
- Error-Free Reporting: Having a crypto tax professional review your Voyager transactions can help ensure your tax reports are accurate and minimize the risk of errors.
- Peace of Mind: For those who find crypto taxes daunting, CoinTracking Full Service provides peace of mind knowing a qualified expert has reviewed your information.
- Help with Complexities: If your Voyager transactions were particularly complex (multiple trades, margin trading, etc.), the experts can guide you and ensure proper reporting.
Is CoinTracking Full Service right for you?
This service is ideal for users who:
- Want an extra layer of security for their Voyager crypto tax reporting.
- Find crypto taxes confusing and need expert guidance.
- Have had complex trading activity on Voyager.
Important Considerations:
- CoinTracking Full Service is a paid service.
- It’s important to note that CoinTracking itself doesn’t guarantee error-free reporting. While it helps with data organization, the final responsibility for accuracy lies with you.
Conclusion:
Navigating Voyager crypto taxes doesn’t have to be a headache. By understanding the taxable events, gathering your transaction history, and potentially using crypto tax software, you can ensure accurate reporting. Remember, this is for informational purposes only. For personalized advice, consult a tax professional for a smooth tax season.
References:
- Internal Revenue Service (IRS): https://www.irs.gov/
- Voyager Bankruptcy Information: https://pacer.uscourts.gov/
- CoinTracking Voyager Integration: https://cointracking.info/
FAQs
Do I have to pay taxes on Voyager?
In most cases, yes, you will likely owe taxes on your Voyager crypto activity. The IRS classifies crypto as property, so buying, selling, trading, or earning interest on crypto through Voyager can trigger taxable events.
Can I claim a loss on Voyager for my taxes?
Absolutely! If you sold crypto on Voyager for a loss (meaning you sold it for less than you bought it for), you can claim that loss on your taxes to potentially offset your capital gains or ordinary income.
How much tax is taken from crypto?
The amount of tax you owe on your Voyager crypto activity depends on several factors, including:
The type of income: Capital gains from crypto sales are taxed differently than income earned from interest.
How long you held the crypto: Short-term capital gains (crypto held less than a year) are generally taxed at your ordinary income tax rate. Long-term capital gains (crypto held for more than a year) benefit from lower tax rates.
Your overall tax bracket: The higher your income tax bracket, the higher the tax rate on your crypto gains.
How do you get around taxes on crypto?
There’s no legal way to completely avoid taxes on crypto. However, there are strategies to minimize your tax burden. These include:
Holding crypto long-term: Long-term capital gains benefit from lower tax rates compared to short-term gains.
Offsetting gains with losses: If you have any crypto losses from Voyager, you can use them to offset your capital gains and potentially reduce your tax liability.
Consulting a tax professional: A tax professional can help you navigate the complexities of crypto taxes and develop a tax-efficient strategy for your specific situation.
