How to calculate cryptocurrency taxes?

1. Determine your cost basis: Your cost basis is the amount of money you invested in purchasing the cryptocurrency, plus any associated fees such as commissions and transaction fees.

2. Determine your gain or loss: Calculate the difference between the cost basis of the cryptocurrency and its current market value. The resulting figure will be your total capital gain or loss.

3. Report your gains or losses: For tax purposes, you will need to report any capital gains or losses on your tax return. Depending on your country of residence, this may need to be reflected in a specific form or section.

4. Consider any applicable deductions: Depending on your country of residence, you may be eligible for certain deductions related to your cryptocurrency trading activities.

5. Pay any required taxes: Once you’ve calculated your taxable income, you must pay any taxes due on time. Failure to do so could result in penalties or interest.