bitTax (Launched April 16, 2014)
bitTax is like TurboTax, but as you might of guessed for Bitcoin (but not like your thinking). The purpose of bitTax is basically to act as an accounting site for all your coinbase or Bitcoin related transactions as far as I can tell . So far you are allowed to link your coinbase account with them or upload CSV data, and or sign up for email news from them.
Checking out their Twitter they claim you can estimate your Bitcoin tax return even though such a thing does not exist maybe it would of been better to rephrase the statement to something along the lines of “Estimate how much you might owe the IRS with bitTax if you actually care to pay the government with something designed to not be taxed.” Considering that is really what they mean to say. Likely though unless someone makes a killing off Bitcoin most people will not care to add Bitcoin earnings to their return since it can’t be proven you “earned” anything, and even if someone does make a killing Bitcoin’s purpose was to avoid things like taxes. With that said the actual usage of their service might be in question because Bitcoin was again created to circumvent the government.
bitTax’s FAQ Quoted in full:
What is bitTax?
The goal of bitTax is to facilitate virtual currency calculations for U.S. tax payers.
In its present form, bitTax is a Minimum Viable Product (“MVP”) existing for demonstration purposes only and should not be relied upon in filing for U.S. tax returns.
bitTax calculates how much in long/short term capital gain/loss and gross income a U.S. taxpayer has to pay to the Internal Revenue Service for each calendar year. This is important to know in case you are planning to amend your tax returns for the previous years.
bitTax also shows in real time your Daily Balance with respect to potential tax liability in the current year. It is important for you to know the remaining amount available to you after taking into consideration U.S. taxes that will be due next year.
Basically, bitTax shows to you in real time how many bitcoins you have after adjusting for your potential U.S. tax liability. So, you can plan your spending and tax paying accordingly.
You can do instant currency conversion by clicking on the button with the $ or BTC amount.
How do you calculate the amount of tax due?
Currently, we use First-In-First-Out (FIFO) methodology.
We assume for now that each transaction from my account to any outsider leads to realized gain/loss.
We also adjust for the short term and long term capital gains/losses. For the sake of testing this MVP version, we assume that short-term capital gains are taxed at 25% and long-term capital gains are taxed at 15%.
We will add a more elaborate tax calculation shortly.
Why do you show bitTax to the public before it is complete?
We hope to have a working version of bitTax before October 15, 2014.
Meanwhile, we will keep rolling out features based on feedback from early adopters like you.
I am a good citizen and I also would like to pay taxes. Why do you do these calculations only for U.S. taxpayers?
We will add calculations for other jurisdictions in the future. Please let us know which countries we should add first.
What about altcoins – litecoins, dogecoins, namecoins, peercoins, etc?
We will get to altcoins at some point in the future. Please let us know which ones you would like to have first.
What kind of information do you collect about me and store on your servers?
We value your privacy. We mean it.
We are not gonna ask for your facebook, linkedin, google+ and other accounts. We are not gonna attempt to figure out who you are.
We do not want to know who you are.
We simply want to provide a useful service to you.
Currently, we store only the latest email address you have provided to us. Upon your request, we will notify you of the results of our calculations. We may also choose to notify you of our future releases.
We do not store any bitcoin-related data. We will notify you and update the answer to this question if and when we decide to store more data on our servers.
We will not intentionally sell, share, or distribute your personal information to third parties, except as required by law.
They also have a disclaimer at the footer of their site which really does make it seem like a real tax website.
IRS CIRCULAR 230 DISCLOSURE: To ensure compliance with Treasury Department and IRS regulations, we inform you that any federal tax advice contained on this web site and its communication is not intended or written by the parties to be used, and cannot be used for the purposes of (i) avoiding penalties that may be imposed on the taxpayer under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.
We would like to hear your thoughts on what you think of this new bitTax.