Ernst & Young Introduces Tax Tool For Reporting Cryptocurrencies (#GotBitcoin?)
Big Four auditing and professional services firm Ernst & Young EY) has launched a tool for accounting and preparing taxes on cryptocurrency holdings, according to a press release published on Mar. 4. Ernst & Young Introduces Tax Tool For Reporting Cryptocurrencies (#GotBitcoin?)
The new tool called EY Crypto-Asset Accounting and Tax (CAAT) is designed to improve accounting and tax calculations for digital currency transactions by both institutional customers that have cryptocurrency on their balance sheets and individuals who trade crypto assets on a smaller scale. The service will be available for those who use EY TaxChat and to EY Private Client Services clients.
The EY CAAT can reportedly get information about cryptocurrency transactions from “virtually all” major exchanges, consolidate data from various sources, and automatically produce reports, including cryptocurrency-related Internal Revenue Service (IRS) tax returns. EY says that it has registered a substantial growth in the number of customers that own crypto assets.
Last month, United States tax preparation software TurboTax Online reportedly partnered with CoinsTax, LLC to add cryptocurrency tax calculation to its services. The service will allow users to import trading data directly from major exchanges. Once calculated, capitals gains and income reports can be downloaded or uploaded directly into Form 1040 Schedule D.
In January, major American cryptocurrency exchange and wallet service Coinbase added resources for customers in the U. S. to claim crypto trades on their taxes through an integration with TurboTax. Users of Coinbase.com and Coinbase Pro will purportedly be able to automatically import transactions into a new, crypto-specific section of TurboTax Premier software.
Meanwhile, the U.S. state of Ohio became the first to allow businesses to pay taxes using the leading cryptocurrency Bitcoin (BTC). Businesses are allowed to pay 23 different taxes using BTC through an online portal that has been set up by the state treasury office.
Accounting Advisor And Crypto Startup To Jointly Launch Crypto Tax Tool
Accounting advisor CPA.com and cryptocurrency accounting automation startup Lukka partnered to jointly launch a crypto asset tax preparation tool.
CPA.com announced the partnership with Lukka in a press release published on Dec. 9. Per the release, the “LukkaTax for Professionals” crypto asset preparation tool for accountants aims to address issues currently faced by companies in the crypto industry.
Specifically, CPA announced plans to start providing services for valuing digital assets and assurance around blockchain technology.
A Pressing Need
CPA.com states that it decided to engage with Lukke because of the growing portion of the American population that owns and trades crypto, and thus will need to claim taxes on their holdings. The firm’s president and CEO Erik Asgeirsson noted that the sharp increase:
“The need for firms to understand the crypto asset category was greatly accelerated with the IRS issuing thousands of compliance letters recently. The combination of an institutional-grade solution from Lukka with our firm enablement capabilities will help firms address these complex client needs.”
According to the announcement, the tool’s browser dashboard allows tax professionals to make updates across multiple clients and upload files to cut data manipulation and mapping times.
Lukka CEO noted the importance of accurate crypto tax assessment for certified public accountants (CPAs):
“We know that every CPA will need to pose the virtual currency question to their clients […] With tens of millions of crypto asset holders in the United States, thousands of these CPAs will then have to deliver accurate crypto tax calculations. It’s challenging and you absolutely have to be correct.”
CPA.com is a subsidiary of the American Institute of Certified Public Accountants, a member association for the accounting profession.
The increasing need for correct cryptocurrency tax management has created a new market for specialized accounting services. CPA.com is not the first company trying to capitalize on this new need.
As Cointelegraph reported at the end of November, Missouri-based software maker CryptoTrader.Tax has launched a new product facilitating cryptocurrency tax reporting.
EY Releases New Tool For Analyzing Bitcoin Transactions And On-Chain Data
EY has added a new solution to its Blockchain Analyzer product suite.
Big four accounting firm EY has launched a new solution for investigating on-chain data including Bitcoin (BTC) transactions.
The new Explorer and Visualizer solution launched as a part of the EY Blockchain Analyzer product suite. According to an announcement on Sep. 27, the beta version is now available for free for individuals.
EY also said that it will soon make the solution available as a service on its blockchain website.
Users will be able to utilize search functionalities along with its visualization technology. It will allow audit teams to explore and track on-chain data by searching for specific transactions, addresses and blocks. They may then analyze the gathered data to manage legal, compliance and fraud risks.
EY global forensic and integrity services lead Andrew Gordon said that the Explorer and Visualizer solution will make financial reporting for blockchain-enabled transactions more convenient. It will help “highlight potential outliers including fraudulent red-flag activities,” he added.
Additionally, EY has launched a new procurement solution on its OpsChain platform — EY OpsChain Network Procurement — which will expectedly enable companies to privately and securely conduct end-to-end procurement activities on the Ethereum blockchain.
Currently available in free beta, the solution is said to move business processes from enterprise resource planning systems to shared blockchain-based smart contracts, allowing them to automatically track volumes and global expenditure. The solution is also expected to help buyers and sellers have parity and work with globally agreed terms and pricing.
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