I work as a freelancer, and my clients pay me in crypto occasionally. I send these clients invoices, and I include the invoices when filing my taxes. Is there a special way to tag these deposits from my client? I’m worried that I am being taxed twice (once from my invoice, and once again when I generate my crypto tax report). For example, should I be marking the value of these deposits as 0 to adjust my cost basis?
Hello!
This is really a question for a an accountant but I’ll chime in with how you can go about representing this in Koinly - the choice and responsibility to ensure it’s correct, lays with yourself.
If you want to treat this payment to be subject to Income tax at the time received, then you could apply the Income tag to it. This will be included in your final Income figure for the year, for you to declare and pay Income Tax on.
If you want to treat this as 0 cost, you may Edit the worth of the Deposit to 0.
You should be prepared to realise the full gains when you later sell it. For example you received 500USDC for your services, but the cost of this is 0, so when you trade with it for an equal amount, you will realize a gain of 500.
So the choice is yours, at what point do you want to be taxed on this acquisition?
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