Bitcoin start-up, Sembro Development, is proud to announce the launch of its dedicated tax sector referred to as SembroTax (sembrotax.com). The initial launch will consist of three Bitcoin automated accounting software products: Individual, Small Business, and Bitcoin Business on December 15, 2014.
Each product downloads directly to the user’s desktop and is optimized for specific entities ranging from “The day-trader” to small businesses which accept the majority of their revenue in the form of fiat but have recently decided or wish to start accepting Bitcoin as an alternative payment to Bitcoin businesses that are primarily new start-ups that receive a majority of their revenue in the form of Bitcoin.
Using Blockchain Technologies derived from the Bitcoin protocol these products not only facilitate the documentation of gains and/or losses through an automated process for tax-reporting purposes but also provide essential financial calculations that vary by product but each includes: Easy set-up and configuration, identification of internal vs. external account transfers, ability to break data down by individual wallet or view combined while also supporting 21 currencies, and is available worldwide. (For more detailed information about each product and its features please visit sembrotax.com)
How exactly does it work? Each instance of the software pulls data in real-time from the Bitcoin blockchain, runs calculations, and re-organizes that information to display on a front-end interface in a matter of seconds (refer to the diagram below for process overview). New users must simply input their wallet addresses upon launching the software for the first time and then it will automatically record all buys, sells, and transfers in the transaction ledger which can be easily exported into an excel spreadsheet and given to an accountant or tax specialist to reconcile any discrepancies or report year end gains/losses.
Since this software works in retrospect and pulls transactions dating back to Bitcoin’s inception in 2009, we believe the demand for these products will surge as the U.S. enters its tax season and both individuals and businesses realize their need for a more detailed past transaction history to comply with IRS standards, and our software provides just that in a matter of seconds.
“What puts our product ahead of the competition”, says Sembro Development President, Ian Worrall, “Is that we developed an infrastructure that only requires a one-time setup which takes less than 10 minutes, requires no importing of data from exchanges, is available globally, provides flexibility to constantly changing regulations, offers more functionality than the competition, and above all, will save tax-payers worldwide time and money.” And he assures us that this is only the beginning.
But why is this important? The IRS ruled that virtual currency is treated as property, making price fluctuations in Bitcoin subject to capital gains taxes, which can be cumbersome. For example, on August 31, 2014 the price of Bitcoin reached a low of $475.17 and a high of $502.54, marking a price swing of $27.37. With Bitcoin’s user base and volatility increasing, these fluctuations are likely to continue, if not exacerbate, and all of them will be taxed.
Now, all Bitcoin users must keep records of all Bitcoin purchases, sells, and transactions, including the time, date, and US dollar value at the time of the transaction to keep up with tax liability. The IRS reserves the right to impose penalties on any individuals or businesses that treated a virtual currency transaction differently than as stated by the IRS in Notice 2014-21. That means the IRS can back tax all Bitcoin transactions past, present, and future.
For the average Bitcoin trader and user, keeping records of all transactions is time consuming and difficult. Since the virtual currency’s inception in January 2009, thousands upon thousands of transactions have been made. Most of which are now subject to taxing via the IRS as the U.S. Supreme Court ruled that the IRS can go back up to 3 years to audit an individual.
Sembro Development created this line of products to save Bitcoin users, traders, and businesses the time and energy required to research and record all of their Bitcoin transactions and the relative fiat value.
With Sembro Development’s recently launched SembroTax sector, mobile gaming, research and analytical tools, and DAC exploration, this software start-up is quickly gaining traction in the emerging Virtual Currency industry. Keep an eye on this company as Bitcoin continues being adopted and check out their newest line of products at sembrotax.com.
*By the editors at altcointoday.com and interview with Sembro Development President, Ian Worrall