Crypto Losses? Koinly Reveals 5 Tax Hacks You Need Now – Press release Bitcoin News

PRESS RELEASE. With crypto markets down around 50% in the past month and over 70% from their highs in late 2021, many crypto investors are searching for answers after their profits from the last few years have evaporated into the ether.

Following the incredible bull market, crypto investors enjoyed over 2020 and 2021; you may now find yourself nursing losses rather than gains ahead of the upcoming tax season. Crypto tax platform Koinly shares 5 little-known tax hacks you need to know after the crypto crash.

1. Pay less tax by holding

Want to avoid paying tax on crypto? While you can’t dodge your tax obligations entirely – there are quite a few ways you can optimize your tax position. But here’s the catch, you’ll need to do it before the end of the financial year to pay less tax overall.

You’ve probably heard it before, but the easiest way to pay less crypto tax is to simply HODL. In many jurisdictions, holding your crypto investment (or other assets like shares) for longer than one year qualifies any gains as long-term capital gains. Depending on where you live, any crypto sold 12 months after purchasing is:

• Tax-free in Germany
• Discounts capital gains tax by 50% in Australia
• Taxed at lower tax rates of 0%, 15% or 20% in the US, depending on individual income over the year

2. Tax-free gains

Tax-free thresholds on your capital gains can help you automatically owe less tax. In the UK, individuals have a CGT allowance of up to £12,300 before paying tax. Germany has a relatively low threshold of €600, while Australians have no such allowance. If you’re in the US, the IRS states any individual’s income under $40,400 pays no Capital Gains Tax.

Knowing the tax-free maximum for capital assets in your country is a great way to help determine your crypto disposal strategy, so make sure you understand how crypto is taxed wherever you are.

3. Offset your gains with losses via tax-loss harvesting

Tax-loss harvesting allows you to claim capital losses by recognising and selling your assets at a capital loss. These capital losses may be carried forward against future capital gains and even over multiple financial years.

For example, if you made $10,000 after buying and selling Bitcoin but lost $10,000 after selling your Ether, you won’t owe any tax since you broke even. This also works if you’ve had a good year in share trading, you can offset those gains with crypto losses.

However, if you have an unrealized loss and do not…