As the cryptocurrency market ebbs and flows, the accounting profession needs to remain flexible with it.
“A lot of accountants have a basic understanding or a general impression of cryptocurrencies,” said Nancy Orben, CPA, senior manager at Blue & Company. “But the problem is if you’re preparing tax returns for anyone who is more than a casual investor, you need to know quite a bit more and there are some key things to look out for.”
Those key signs are part of what Orben will discuss at the April 23 Cincinnati Spring CPE Conference during her portion of the presentation “The Changing Business Environment: Cryptocurrencies, Tariffs and More.” Also presenting with Orben will be Joseph Dehner, an attorney with Frost Brown Todd LLC, who will cover tariffs.
Orben said there are savvy investors in cryptocurrency who understand the tax implications, but some taxpayers who have made numerous transactions might not realize they need to provide additional documentation. She said because of this, it’s easy to incorrectly report this information on a tax return if you aren’t aware and didn’t know to ask more questions.
“From an accounting standpoint, there’s also an issue with accounting software in that a lot of the cryptocurrencies go out to eight decimal places, versus the U.S. dollar which is typically calculated to two decimal places,” she said.
The decimal place issue is another topic Orben said she will cover during her presentation, along with a historical perspective of cryptocurrency, the different types and how the market value has changed over the last few years.
“The changes in the market value from year to year have an impact on the type of income tax filing that people would be filing,” Orben said. “Based on whether the markets went up or down they would have gains or losses, impacting their tax filing. I’ll talk about how you would gather information from a client to actually calculate the gains and losses because that can be rather complicated.”
Depending on your interest level, Orben said there are many options accountants must learn about. She suggested attending conferences like Cincinnati Spring, looking for meetup groups and subscribing to various cryptocurrency newsletters to get a better grasp of what’s going on.
“I would like accountants to have a better understanding of taxation of cryptocurrency and how to report them on a tax return,” she said. “If they have a business that’s either thinking about accepting cryptocurrencies or needs to do accounting for cryptocurrency transactions, it’s important to have an understanding of how to do that properly.”
Register now for the Cincinnati Spring CPE Conference.
Nancy will be also be presenting at:
Northeast Ohio Spring CPE Conference on May 8
Columbus Spring CPE Conference on May 14