IRS reminds filers to answer important question on this year’s tax forms.
In this March 22, 2013, photo, the exterior of the Internal Revenue Service building is seen in Washington.Filers hoping to avoid delays in any refunds – or possible fines and penalties – are being reminded to answer an important question when filing their 2021 taxes.
The Internal Revenue Service recent issued a reminder to answer a question regarding virtual currency on 2021 Forms 1040 and 1040-SR. The question is: “At any time during 2021, did you receive, sell, exchange, or otherwise dispose of any financial interest in any virtual currency?” All taxpayers - not just those that engaged in transactions involving virtual currency in 2021 - must check one box answering either “no” or “yes.”Here’s how to know which category you fall under, according to the IRS:Taxpayers who merely owned virtual currency at any time in 2021 can check the “No” box when they have not engaged in any transactions involving virtual currency during the year, or their activities were limited to:Transferring virtual currency between their own wallets or accounts.
Purchasing virtual currency using real currency, including purchases using real currency electronic platforms such as PayPal and Venmo. Engaging in a combination of holding, transferring, or purchasing virtual currency as described above.
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