Crypto accounting firm Lukka releases new tax preparation product
Cryptocurrency firm Lukka is going to release a new tool on Jan. 15 for retail investors. The company has been working on providing institutional-grade solutions for crypto investors and funds. The tool is an updated version of LibraTax, a crypto tax calculator that was built and deployed back in 2014. The aim is to help retail investors calculate how much tax they will need to pay.
Cryptocurrency accounting firm Lukka announced a crypto tax product for retail investors. Known as LukkaTax, it originated from LibraTax, a commercial crypto tax calculator Lukka released in 2014 when the company was first created.
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Retail investor-focused year
While Lukka was mainly focused on providing institutional solutions for crypto funds, fund administrators and enterprises, the company is now serving retail investors who must specify to the IRS their transactions in virtual currencies. Lukka CEO, Jake Benson, told Cointelegraph: “This year we are focusing on the retail investor because, for the first time in six years, the IRS has explained to taxpayers how they want to treat the cryptocurrency. There is a new question that appears first on the IRS Schedule 1 tax form that asks, “Do you have any transactions in virtual currencies for this year?”
According to Benson, 2019 will be the first tax year when the IRS will directly ask taxpayers to document their activities in virtual currency, setting the priority of this question to the top of its new IRS Form 1040 Schedule 1.
“Six years ago, taxpayers were supposed to report profits and losses on any asset, but this has largely been avoided, as it was never explicitly stated. This year, the question is specifically mentioned in the main tax form,” explained Benson.
Solution for taxpayers and CPAs
Recent statistics showed that 14.4% of Americans own cryptocurrency. This means that millions of Americans will be responsible for reporting on crypto in their tax forms this year.
At the same time, LukkaTax will be available on Jan. 15 to support the 2019 tax season, as well as previous tax years. Like other software solutions that are “do it yourself” (for example, TurboTax, but for cryptocurrency), Lukka charges $19.95 for an annual subscription and $9.95 for customers who make pre-purchases before January.
According to Benson, LukkaTax is a standalone product that uses the same infrastructure as Lukka’s leading institutional solutions. The tool works in three steps. Users first load their cryptocurrency transactions to the platform. These transactions are calculated and a report is created showing how much will investors have to pay in taxes.
While investors can use the product together with other traditional solutions such as TurboTax, Benson noted that there are two versions of LukkaTax—one for individuals and one for certified public accountants.
“According to CPA.com, 45% of Americans pay their own taxes and 55% go to tax practitioners for help. This is great for CPAs who don’t know the cryptocurrency industry at all,” said Benson.
Benson also noted that last Dec. 9, Lukka signed a partnership agreement with CPA.com, one of the largest accounting firms in America. This partnership is beneficial as LukkaTax will now be a preferred tool that CPA.com clients will utilize.
“CPA.com selects only a small number of software companies to collaborate with. This is an honor for us as it will give a huge number of CPAs across the country direct access to our tool. Forty-five thousand accounting firms will now have access to LukkaTax,” said Benson.
The company will continue to focus on institutions
While LukkaTax is a tool for retail investors, Benson specified that the company is still very much focused on institutions: “This is the first time we are doing anything with retail investors since this year is the year that recent tax compliance announcements have been made regarding cryptocurrencies. Although the partnership with CPA.com is greatly expanding our retail capabilities, we still have excellent partnerships with institutions. We are now expanding both in retail and institutional direction.”
Benson also said that there have been talks with major exchanges to partner with Lukka in the future. “We’re already working with major players such as Kraken, Circle and ShapeShift and we’re also negotiating with others.”
(Featured image by stevepb via Pixabay)
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