You are probably here because you are confused with how to make your crypto trading software and cryptocurrency portfolio manage rock solid business while still paying taxes on it. This is an issue that many people face when investing in cryptocurrency due to its status as a highly volatile market. You must just know that your crypto trading is perfectly legal. Your project is your trading program and portfolio management software which will help you with your trading and tax management. The benefit of this guide is that it will greatly help you in the development of your crypto trading program.
1. Know Your Reporting Requirements :
The first thing you should do is to know your initial reporting requirements. Examine your income statement and balance sheet of your cryptocurrency portfolio management software as it may help you in evaluating your business. Your balance sheet and income statement are critical accounting tools that can help you in knowing the health of your business. It will also allow you to examine whether or not you are making a profit by keeping track of the income, expenses and the capital in which they are listed.
2. Keep Ledger of Your Transactions :
The second method that you can use to ensure that your trade and tax management are on the right track is to keep a ledger of your transactions. This ledger will help you understand the trading activity that you have had with any other person or organization. You will also find it easier to categorize the amount of money you have received and spent during a specific period of time. It will also enable you to keep track of the revenues generated and the expenses you have incurred.
3. Stay Up to Date with Your Jurisdictions Laws :
The fourth method that you can use to ensure that your trade and tax management are on the right track is to stay up to date with your jurisdictions laws. This is because they are an essential tool in ensuring that you are able to submit the relevant reports within the due date. You should also stay at the latest with the tax on cryptocurrency as it can help you in spotting important trends and patterns associated with the market which may make a massive impact on the future of your trade program or portfolio management.
4. Keep a Record of Your Trading Activity :
The third method that you can use to ensure that your trade and tax management are on the right track is to keep a record of your trading activity. This is because it will help you in the creation of reports which show the amount of profit or loss that you have created during a specific period of time. You will also be able to keep track of how much you have spent and received in funds during this period. It will also be useful when you want to show that you have been purely trading and not conducting any illegal activity.
Binocs is a crypto portfolio management and innovative trading platform where users can buy, sell and manage both crypto and fiat assets. It comes with a portfolio tracker, social trading platform and market analysis tools to help Crypto traders in managing their portfolios. It also offers common financial instruments such as stop loss orders and margin trades for those who desire more flexibility in their investments.