This upcoming tax season will be the first time many Bitcoin users take a crack paying taxes on their digital currency purchases., Microsoft and others started accepting it as a payment method.The IRS said in 2014 that Bitcoin is a property, not a currency.So, prepare to carefully pore over every single item you bought last year with bitcoins.First, the basic rule: The government views Bitcoin kind of like company stock.If it increases in value and you sell it, you experience a "gain" -- like a capital gain -- and must report it as income.Now for reality: The value of a bitcoin steadily slid last year by 58%.It started the year at $748 per bitcoin and ended at $317.It performed worse than the Russian ruble.So you likely didn't experience any gains, and you don't owe taxes.Let's say you're the average person who dipped toes into Bitcoin, maybe buying a single bitcoin and spending some of it on a few items throughout the year.You'll have to compare the value of the original bitcoin with the value of the portion you spent.

For example, let's say you bought 0.1 BTC for $60 in July and the value fell to half in October.That's when you spent it at a high-tech bar.That portion was then worth $30.You experienced a $30 loss.Now repeat that over and over again.This gets wildly confusing if you acquired Bitcoin several times, explained New York tax lawyer Tyler S. Robbins.If you just kept adding bitcoins to your wallet, it's like pouring water into a glass.How do you determine an "original value?"They're all mixed in together."This is extremely burdensome -- a lot of headache for ridiculously small dollar amounts," said Omri Y. Marian, who teaches law at the University of Florida.Ironically, it'll be worst for those who used Bitcoin most trivially.The accounting is actually easier for those who bought large amounts as a risky investment and sold it in a few, large chunks.Some accountants say Bitcoin users can claim the drop in the digital currency's value as a capital loss up to $3,000.This lowers your overall income, shrinking how much you owe in taxes.

Luckily, Bitcoin keeps a perfect, public record of transactions.And most Bitcoin wallet software programs, like Blockchain.info, offer simple ways to export your data into a spreadsheet.There's even an automated Bitcoin calculator, called LibraTax, that's free as long as you're counting 500 or fewer transactions.You just plug in your wallet IDs.It took me only 10 minutes calculate my 2014 bitcoin purchases.In the rare case you did experience a gain and owe taxes, your accountant will probably charge you an extra $25 to $100 for that one line item, according to W. Hunter Robinson, an accountant in Memphis, Tenn.You'll have to use an additional tax form, called an 8949.This is why many people thought the IRS made a mistake by not classifying Bitcoin as a currency.If it did, that would let you ignore most price fluctuations, similar to spending euros or yen while on vacation.In the end, most people are likely to just ignore these rules and not report a thing, according to Steve Rosenthal, a senior fellow at the Urban Institute.

"The rules are too complicated, and they result in a bizarre answer," he said.Jose Pagliery is the author of Bitcoin - And the Future of Money (Triumph Books, Chicago).It is more important than ever to have a tax and financial advisor* who understands the complex systems of taxes, investments*, and retirement.In far too many cases, people use multiple financial advisors, and these financial plans often do not work together.ethereum elon muskThis can potentially cost a lot of money over the years.At Williams Tax and Financial Services, our goal is to bridge that gap.free bitcoin faucet boxA tax & financial advisor* who provides , *, , and can look at your personal financial plan as a whole.1 bitcoin ile to euroReceiving ongoing personal tax and financial advice should be a major priority to anyone concerned about his or her financial well-being.bitcoin mcafee

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Our approach combines financial advice with investment guidance.We strongly believe in the concepts of asset allocation, diversification, and active rebalancing.Each of these investment concepts is individually important; it is the combination of these concepts that manages the overall risk and return of an investment portfolio.Retirement planning puts your life plan on paper and prioritizes and organizes your goals.In fact, a recent study shows only 46 percent of Americans know how much they need to save for retirement.Having an organized plan that is broken down into smaller, actionable steps, such as the , can help you be disciplined and stay on track.This can help streamline the financial planning process and give you the confidence you need to move toward with your financial goals.This will also identify areas of strength and those that need some assistance.This three-minute video explains how your Advisor starts with taxes, defines and prioritizes your wealth management issues, creates a plan, and then brings that plan to life.We have enjoyed serving the Richmond, Kentucky and surrounding areas of Lexington, Kentucky.