Five crypto tax tips for stress-free reporting

Tax season for crypto holders can get a little confusing. As more investors dip their toes into crypto investing, it’s important to understand how your transactions are taxed, and to report them properly. 

In this guide, we dig into five practical crypto tax tips to help investors stay compliant and avoid any surprises at tax time. 

We’ve teamed up with the experts at Crypto Tax Calculator to bring you these tips. As part of our collaboration, they’re offering 30% off for first-time subscribers, making it easy to work out your Bybit and other crypto taxes in just a few clicks.

Key Takeaways:

• All crypto transactions are taxable — so you need to report gains, losses and income accurately to stay compliant.

• Using a crypto tax calculator that integrates with Bybit simplifies reporting and reduces errors.

• Reviewing transactions and exploring strategies such as tax-loss harvesting can help optimize your taxes.

How tax authorities treat crypto

Cryptocurrency is typically treated by tax authorities as property, not currency. This means that crypto transactions are taxable, and therefore have to be reported. How they’re taxed depends upon the jurisdiction in which you’re located, the type of activity and your intent. 

• Capital gains tax (CGT): This applies when you dispose of an asset – such as selling, swapping and trading.

• Ordinary income tax: Applies when you earn crypto through mining, staking or receiving airdrops. Crypto assets are taxed at the time they’re received. If you’re a professional crypto trader, then your crypto gains are also treated as ordinary income. 

Whether your crypto transactions are taxed as CGT or ordinary income, all of your transactions are taxable — even if you don't make a profit, or the trade took place on-chain. Any losses can be carried to future years to offset your capital gains, so it’s worth always reporting — even in years where your portfolio is in the red.

Five useful crypto tax tips 

Here are five practical tax tips to help Bybit users (and any crypto investor) stay compliant and make tax season easier. 

1. Use a crypto tax calculator that integrates with Bybit

Tax reporting doesn’t have to hold you back. Our new partnership with Crypto Tax Calculator means that you can connect your Bybit account in just a few clicks. The integration automatically pulls in your transactions, saving you hours of manual work so nothing is missed. 

2. Import crypto transactions from all of your wallets and exchanges

Even if you mostly trade on Bybit, you need to include all of your crypto transactions in your tax report. While importing every single transaction may seem like tedious work, it doesn’t have to be. With our Crypto Tax Calculator integration, you can: 

• Import your Bybit transactions automatically with API keys or CSV files

• Sync data from over 3,500 exchanges, wallets and blockchains

• Automatically label activity across Bybit’s products, including derivatives, spot trades and more

If you also trade non-fungible tokens (NFTs) and engage in various advanced trading methods within decentralized finance (DeFi), Crypto Tax Calculator also supports more complex crypto transactions, such as those involving staking, liquidity pools, airdrops and NFTs. 

3. Double-check your transactions to make sure they’re correct

Whether you’re a regular crypto investor or you only trade casually, it's easy to overlook details. Once all of your transactions have been imported, carefully review them for errors or missing data. Crypto Tax Calculator’s review tools make it simple to spot issues so you can file your report stress-free. 

4. Look for tax savings opportunities 

Now that you’ve checked all of your transactions, it's time to review your losses to see where you can save. You can use strategies such as tax-loss harvesting — whereby you sell at a loss — to reduce the taxes you owe. 

Crypto Tax Calculator’s tax-loss harvesting tool helps you quickly identify assets that have decreased in value since you first acquired them. You can sell these assets before the end of the financial year to reduce any capital gains you may have made. 

Note: Keep in mind that many tax authorities consider wash sales a form of tax avoidance. This typically happens when an investor sells an asset at a loss, and immediately buys it back to create an artificial capital loss to report on their taxes. 

5. Generate tax reports and prepare to file 

Here comes the fun part (it’s true): generating your tax reports and filing. Crypto tax rules can vary depending upon where you live, so you’ll need to make sure you’re generating tax reports that are specific to your region. Crypto Tax Calculator currently supports over 20 countries, including Germany, the Netherlands, Belgium, Switzerland and Japan. 

Whether you’re submitting online or filing with an accountant, you’ll have everything you need to submit with confidence.

Being prepared and proactive is the best way to stay ahead for the tax season. While crypto tax regulations are continuing to evolve, most jurisdictions still require you to report any gains, losses and income. 

To help keep your reporting stress-free, you can use Crypto Tax Calculator for your crypto transactions and earnings on Bybit. Just connect your Bybit account, import all of your transactions and let the platform automatically figure out your gains, losses and income. Your tax-compliant reports will be ready for you in minutes, not hours. 

If you want to make tax season less difficult, take advantage of the 30% discount on Crypto Tax Calculator for first-time subscribers. Save time, reduce errors — and file with confidence this financial year. 

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