- 1 January 2020
- Posted by: btcbros12
- Categories: Articles, Finance & accounting, News
Cryptocurrency can prove to be an amazing investment. The market tends to be extremely volatile, and this can mean trouble. However, it also means that there is a great possibility to rake in immense profits.
There is a lot to discuss with regard to cryptocurrency. However, an aspect that is almost never spoken about is the application of accountancy associated with cryptocurrency. Like all investments, cryptocurrency also requires accounting and bookkeeping.
Accountancy allows investors to keep track of their investments. This means that individuals will be able to have a better understanding of their assets, liabilities, and income. This can help make better investments and improve one’s financial health.
By the end of this article, one will be able to understand the importance of accountancy in cryptocurrency and why crypto accountants are the need of the hour.
Tax and Cryptocurrency
In every sort of investment or business, some sort of tax is involved. However, as far as HMRC is concerned, cryptocurrency is neither money nor currency and hence will not be treated as such. This view is in line with the previously published Cryptoassets Taskforce Report.
The Cryptoassets Taskforce is a joint collaboration of HM Treasury, the Financial Conduct Authority and Bank of England. The taskforce was created to explore regulatory measures that could be implemented and applied to the ownwership, trade and exchange of cryptocurrencies in the UK.
However, regardless if this view, companies and businesses which purchase, sell, trade, or mine digital assets, or even accept them as payment in exchange for goods and services, are required to pay taxes. The type of tax that they are paying is variable and depends on the specific transaction.
This is all very tricky and confusing. Crypto accountants do exist to help individuals get through these confusions.
What are crypto accountants?
Crypto accountancy can be described as the application of accounting and auditing principles into evaluating and using cryptocurrency based public assurance networks.
That is what crypto accountants do. They take care of the accountancy aspect that comes with every bit of cryptocurrency.
Be it calculating tax or checking for tax compliance, crypto accountants will be able to cater to all of one’s needs.
Accountants with a specialization in cryptocurrency are the need of the hour because without a good understanding of cryptocurrency, accounting for it is difficult. Specialized knowledge is important because most accountants without this skill may not be able to help an investor make the most of their investment in cryptocurrency. They may manage to help one keep everything legal, but there is no surety that they will be able to help investors get better returns.
Benefits of using Crypto accountants:
Crypto accountants are a necessity. There are a lot of places where there can be losses primarily due to the lack of a good crypto accountant. With the world moving toward cryptocurrency, meaning that even transactions will be made in bitcoins and altcoins, even normal businesses will need accountants who know their way around cryptocurrency.
With specialized skills related to crypto, a crypto accountant will be able to help individuals file taxes for their crypto investments. They can save one a lot of money by filing taxes right. They would also be able to help individuals invest correctly in cryptocurrency.
In essence, crypto accountants are important assets for anyone who works with cryptocurrency. Accountants skilled in the field will be equipped to deal with the troubles that come solely with cryptocurrency.