Individuals and businesses that have transacted in Bitcoin and other digital currencies can now easily calculate their tax obligations using Libra's tax software.
The software will accommodate all 2013 and earlier digital currency users, including those who filed for extensions in spring 2014. Even those who have already filed will want to amend their tax returns once they discover that reportable capital gains may be significantly reduced with optimized accounting options.
The recent guidance given by the IRS in March to treat digital currency as property requires that taxpayers report digital currency gains and losses on state and federal returns. Taxpayers and tax professionals alike have been uncomfortable and encumbered with this manual calculation because it is extremely time-consuming and prohibitively difficult. With its first-to-market and comprehensive solution, Libra completely automates the accounting process by retrieving the user's transaction history from the public ledger (called the blockchain) and synchronizing that with the digital currency's historical fair market value. All types of taxable events are also accommodated, including income, gifts and donations. In a few seconds, the software dynamically computes gains or losses by applying several optional cost-basis methods. In almost every case, the accounting method used can output a tremendously beneficial report to realize minimized or no reportable gains.
This long-anticipated release to the public comes after extensive closed-beta testing with qualified testers. "We're excited that these easy-to-use, automated tools for consumers, tax professionals and accounting firms are finally available," said Libra founder and CEO Jake Benson.
In addition to LibraTax, the company is also developing a product suite for small business and enterprise needs. Of special interest to CPAs who are experienced with digital currencies will be Libra's CPA affiliate program which links them with individual or corporate taxpayers seeking professional help. Pre-registration will commence with the public beta.
"Our primary objective is to haveve approachable, convenient software that simplifies the end-user experience associated with taxpaying—ultimately saving users precious time and money. We've accomplished that without a doubt," added Benson.