Working with a tax accountant
- Author
- CRYPTO PORT Editorial
- Published
- Updated
- Reading time
- 6 min
In short
If you hand a crypto return to a tax accountant, the better organised your material, the smoother and usually the cheaper the engagement. Establish at the outset whether they have experience with crypto and exactly what the engagement covers. Since responsibility for the return does not leave you entirely, make sure you understand what comes back.
Key points
- Ask up front whether they have handled crypto before
- Agree clearly where their work ends and yours begins
- The better prepared your material, the less time and cost it takes
- Make sure you understand the return that comes back
Definition
Consulting or engaging a tax accountant for a return involving crypto, and supplying the material and information the work needs.
The cases for getting advice are clear enough: high transaction volumes, several venues at home and abroad plus wallets, DeFi or NFTs in the mix, gaps in your history, several unsorted years, activity that might have the substance of a business, or significant amounts. If any one of those applies, consulting early is safer than trying to finish it alone.
The first thing to check when choosing is crypto experience. Not every tax accountant works with it. It is entirely reasonable to ask directly whether they have handled matters involving DeFi or NFTs, and whether they have worked with the output of crypto calculation tools. One who has will give you specific instructions about what to bring, and the engagement will move faster.
Next, agree the scope. Handing over everything from collecting history to computing the result, doing the calculation yourself and asking them to prepare and review the return, or taking advice only are three very different engagements in cost and duration. Since the calculation is the laborious part, whatever you can tidy up yourself reduces the work.
Material to supply: the list of exchanges and wallets you used, the history you have collected, annual statements, copies of previous returns with closing balances, the output of any calculation tool, and notes on where history is missing and what happened. On top of that, be ready to describe in words what you did during the year — without knowing the intent and mechanics of a transaction, even a specialist cannot classify it.
Finally, understand the return that comes back. Have them explain the assumptions behind the figures and which cost basis method was used, and proceed once that makes sense to you. Handing it over without understanding leaves you unable to carry forward into next year and stuck if anyone later asks a question. Engaging a professional is not the same as giving up on understanding your own return.
Watch out for
- · This page is a general orientation, not tax advice
- · This site neither introduces nor recommends any particular tax accountant or firm
- · Even with a professional engaged, avoid proceeding without understanding the return
Frequently asked questions
Can I consult before my material is in order?
Yes — consulting early is worthwhile even then, because you get specific instructions on what to gather and how. That said, whatever you can put in order yourself tends to reduce both the time and the cost involved.