TaxAct Warning Before Filing

Tax Questions
#1

I followed the instructions that Nelly went through on the Koinly Youtube page for filing my taxes and filling everything out in TaxAct. I got a little spooked when it came time to actually file because of a disclaimer I received:

More than $400 of other income has been included on Schedule 1 (Form 1040), line 9. The IRS will review your return and request an explanation for this other income which will delay the processing of your return. You may continue with e-filing by reading and acknowledging the following statement:

I understand that: my federal return will be reviewed by the IRS; processing of my return may be substantially delayed; my refund may be reduced by the IRS; the IRS may request additional information regarding this income.

Do you think there is an alternative acceptable way to report this income rather than Schedule 1 in other? I believe it’s mostly from airdrops.

#2

I have a ridiculous number of staking transactions that would make the cost of any Koinly plan result in a loss due to exceeding the limits plus eating up the small amount of income that was reported. I calculate them using an excel spreadsheet - all the proper columns etc just as would be required here in a csv. (I have done this with the csv from staking platform) If you can get those monthly it is helpful to do over the course of the year if you have lots of different assets to do this for (I had a csv over 500k lines to edit from a single token that gives rewards hundreds of times a day plus some dust in other tokens that also receive rewards less often)

-I add a column for the closing price of the asset
-multiply that price by the number received and total column
-calculate fees the same way and total the column
-calculate the income less fees = net income and put that in Other Income as hobby as was recommended by TurboTax

Save and label clearly what the file is and note where I reported on my taxes in case I am asked information in an audit. Hope this helps

StakeCube, btw, has made a Koinly user friendly csv that condenses the number of transactions that might help some of us meet plan expectations.

#3

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