By Michael Scott
Crypto tax startup ZenLedger confirmed partnering with an artificial intelligence (AI) powered tax software entity. The partnership targets simplifying the tax filing process in a harmonized platform that will facilitate crypto traders to import trade data from a single tap.
ZenLedger’s chief executive Pat Larsen hailed the partnership to simplify the tax filing process as timely given that the IRS plans to increase audits.
The crypto tax firm is considering a partnership with the AI-powered software firm to reinforce its capability to serve US clients. Forging the partnership will help the Larsen-led firm seek to eradicate the anxiety portrayed by users when filing taxes.
The two firms revealed in the joint statement that more US citizens have portrayed increased interest in crypto assets investment and trading. The increased activity translates to complex cryptocurrency taxation for individuals and participating institutions.
ZenLedger Eyes Simplified Tax Filing
The representatives drawn from the two companies considered that crypto trading and investment participants encounter challenges when juggling various platforms in pursuit of tax compliance.
The firms illustrated that navigating tax liability arising from crypto trading and investment is set to evolve. Such is inevitable given the ongoing efforts by the Internal Revenue Service (IRS) devoted to ascertaining how to treat crypto usage by individuals and entities.
The IRS revealed in a recent disclosure that individuals involved in crypto trade must file crypto-related transactions that exceed $10,000. Nonetheless, the IRS failed to offer a crystal clear framework for functioning the new requirement.
Completing the partnership with Turbo Tax will enable ZenLedger to deliver a simplified tax filing process by leveraging a single platform. ZenLedger described the tax software firm as IRS-authorized in providing e-files. Larsen indicated that the integration will enable the ZenLedger users to import the aggregated trade data from a single tap into April’s platform.
April co-founder and chief executive Ben Borodach illustrated that by Thursday, January 11, the US witnessed 400,000 Bitcoin-based transactions daily.
Borodach contextualized the crypto trading activity to illustrate the complexity of ensuring tax compliance. The executive indicated that consolidating tax experiences into a single filing will enable traders to import multiple transaction data. Doing so yields a seamless user experience that eradicates the risk of errors and inaccuracies.
Satisfying Demand for Crypto-Specific Tax Solutions
Borodach reflected on the spot that Bitcoin exchange-traded funds (ETFs) approved will fuel the demand for comprehensive tax solutions. The situation mandates offering crypto-specific solutions to allow the traders and market participants to feel confident in their tax reporting.
Larsen pointed to the update by the US Treasury Department that it seeks reporting of crypto activity from crypto exchanges and wallets. The executive anticipates increased audits from the IRS, hence obligating the pursuit of correct filing of taxes since audits roll back for several years.
The move by ZenLedger to simplify tax reporting is timely, given that the IRS has since 2020 been keenly assessing crypto taxation. Earlier in 2020, the IRS directed individuals to indicate their participation in digital currency in the 1040 form.
ZenLedger’s devotion to bolstering tax compliance has seen the startup become attractive to investors. The firm’s investors include Three Point Capital, Bloccelerate VC, and Radical Ventures of Mark Cuban.