**Digital Asset Transactions Now Required on Tax Returns** The Internal Revenue Service (IRS) has issued a reminder that taxpayers must now answer a "digital asset" question on their tax returns. This includes reporting any transactions involving cryptocurrency and non-fungible tokens (NFTs). **Income Reporting** Any income earned from digital asset transactions must be reported on your federal tax return. This includes gains from selling or trading digital assets, as well as any other income derived from these transactions. **Filing Crypto Taxes in 5 Steps** To ensure accurate reporting of your cryptocurrency taxes, follow these five steps: 1. Determine your cost basis for each transaction. 2. Calculate your gains or losses for each transaction. 3. Report any gains as taxable income. 4. Deduct any losses from your taxable income. 5. File your tax return using a tax software or accountant that supports cryptocurrency reporting. Remember, failure to report digital asset transactions on your tax return can result in penalties and interest. It's important to comply with the IRS's new reporting requirements to avoid potential tax liabilities.
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