Cryptocurrencies are currently experiencing a prosperous period, with potential for investors to see significant returns as 2024 comes to an end. However, this also means good news for the IRS, as taxes on crypto profits will need to be paid. It is essential to consider your tax position sooner rather than later, especially with promising coins like Solaxy ($SOL) on the rise.
Investors are flocking to meme coins such as Crypto All-Stars ($STARS), Wall Street Pepe ($WEPE), and CatSlap ($SLAP) in search of high staking yields and price increases. While enjoying bullish markets, it is crucial to remember that a portion of profits must be allocated for taxes. The IRS is implementing new rules starting January 1st, so planning ahead for tax bills and utilizing losses to offset profits is advisable.
Understanding when crypto becomes taxable is essential. According to Forbes, taxable events include selling crypto for fiat currency, trading one cryptocurrency for another, spending crypto on goods or services, earning crypto through staking or mining, and receiving airdrops or hard forks. If any of these actions were taken in 2024, it is necessary to consult with an accountant for the appropriate tax forms.
Utilizing losses to reduce tax bills is a legitimate strategy known as tax loss harvesting. By selling underperforming assets at a loss and reporting it to the IRS, investors can potentially decrease their tax liabilities. This tactic must be implemented by December 31st to impact the 2024 tax bill positively and may even extend to future years.
One standout coin, Solaxy ($SOL), is gaining traction due to its innovative approach as the first Solana Layer 2 protocol addressing congestion and scalability issues. While other coins like Wall Street Pepe and CatSlap are experiencing declines, Solaxy is seeing significant gains with a current token price of $0.00001839 and a staking APY of 1,280%. Including Solaxy in a portfolio may prove to be advantageous.
It is important to note that the information provided is general in nature, and consulting with an accountant or tax lawyer is recommended to ensure compliance with tax regulations. Conducting thorough research and seeking professional advice are crucial aspects of navigating the crypto landscape effectively.
