Avoid these 3 common crypto mistakes when filing your taxes, says CPA: ‘I see these all the time’ 

The Internal Revenue Service is scrutinizing cryptocurrency holdings more closely this tax season, and failing to report yours could cost you — even if you didn’t make or lose money.Every time you sell, trade or spend crypto, it’s considered a taxable event, regardless of whether you ever cashed out to dollars, according to the IRS. One common mistake is not realizing that swapping one cryptocurrency for another can still triggers taxes. “A lot of people still believe crypto-to-crypto trades aren’t taxable because they never receive cash in hand. Unfortunately, this is not the case,” says Shehan Chandrasekera, a certified public accountant and head of tax strategy at crypto tax software company CoinTracker.If you swap bitcoin for ether, the IRS considers it a taxable event, even though you never converted your crypto to cash. And if the bitcoin you traded had increased in value since you bought it, you could owe taxes on the gains — just like if you had sold a stock for a profit.That’s because cryptocurrencies like bitcoin are treated as property under IRS rules, meaning they’re subject to capital gains and losses, just like stocks. That said, if you held crypto all year without making any transactions, you won’t need to report it as taxable income on your tax return. However, you will still need to check “Yes” on your tax return if you bought or received crypto, as the IRS requires disclosure of digital asset activity even if no taxes are due.Common tax mistakes crypto holders makeBeyond not realizing that crypto-to-crypto transactions are taxable events, Chandrasekera says crypto holders often make two other key tax mistakes:Assuming they don’t owe taxes unless they receive a tax form from their trading platform.Failing to track transactions, which can make accurate reporting to the IRS difficult.”I see these all the time,” he says. While more crypto exchanges are issuing 1099 forms to report trading income, they don’t always capture all activity — especially if you trade across platforms or use your own wallets. That’s why every crypto holder is responsible for tracking their own transactions.”It may seem tedious, but failing to record every trade, swap or airdrop can lead to errors in calculating gains and losses — and eventually, trouble with the IRS,” says Douglas Boneparth, certified financial planner and president of Bone Fide Wealth.To stay on top of it, Boneparth recommends using crypto tax software like CoinTracker, CoinLedger or Koinly. By tracking every transaction, you’ll be prepared in case the IRS decides to verify whether you owe taxes.Think twice about not reporting your transactionsFailing to report your crypto transactions — including income, gains or losses — can lead to audits, penalties, interest on unpaid taxes and even criminal charges.If you’re hoping the IRS won’t notice missing transactions in your tax return, keep in mind that “the IRS has become much more sophisticated in tracking crypto transactions,”