Taxes Done Right with EG Tax · Esther Gulyas

Taxes Done Right Episode 48: Crypto Currency and More

·25 min·2 clips

Chris warns that failing to take your required minimum distribution could cost you a 50% penalty from the IRS.

This episode focuses on year-end tax planning strategies, particularly for retirement accounts and cryptocurrency. Hosts Esther and Chris of EG Tax provide actionable advice as the tax year concludes. They acknowledge the emotional challenges of the holiday season for some listeners before shifting to financial guidance. The first critical deadline discussed is the Required Minimum Distribution (RMD) from retirement accounts. The IRS imposes a 50% penalty on any RMD amount not withdrawn on time. For example, failing to take a $10,000 distribution could result in a $5,000 penalty. The hosts note the IRS may waive this penalty for severe personal hardships, like a spouse's hospitalization. They caution against relying on this waiver, emphasizing proactive compliance. A primary topic is the tax treatment of cryptocurrency transactions, including buying, selling, and trading digital assets. The hosts explain that each crypto trade is a taxable event, creating a complex record-keeping burden. They stress the importance of documenting the fair market value of crypto in U.S. dollars at the time of every transaction. Many taxpayers are reportedly unaware that trading one cryptocurrency for another triggers a capital gain or loss. A surprising claim is that the IRS can track cryptocurrency transactions through exchanges and blockchain analysis. The hosts state that failing to report crypto activity is a major audit trigger. One memorable insight is that the tax basis for mined cryptocurrency is its fair market value on the day it was received. They also clarify that receiving crypto as payment for services is treated as ordinary income. The tone is conversational and educational, blending straightforward advice with empathetic asides. The style is practical, designed to help listeners avoid penalties and navigate complex rules. Listeners seeking last-minute tax-saving strategies or clarity on crypto taxes would find this episode valuable. Individuals with no cryptocurrency holdings or who have already completed their year-end financial planning might find the advice less immediately relevant.

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