Save time on reporting polkadot on your taxes
POLKADOT: PERSONAL INCOME IN CASE OF GAINS - DEDUCTIBLE EXPENSE IN CASE OF LOSSES
When you earn money by selling cryptocurrency, you need to pay taxes on gains. The tax rate is the same as you would pay for personal income - so 37-52% depending on your tax bracket.
Due to the current taxation laws for polkadot and other cryptocurrencies, you cannot deduct losses from any gains, when you lose money on selling cryptocurrency. Here, you will get a deductible expense, corresponding to a tax value of about 25%.
This means that you will be taxed with 37-52% in case of any gains, while you will get 25% in deductible expenses in case of any losses. If you were to earn 1,000 on polkadot, and you pay 37% in taxes, you would have to pay 370 DKK in taxes. And if you’ve lost 1,000 DKK on polkadot in the same year, you would “get” 250 DKK back.
An overall result of -120 DKK, even if you’ve technically broken even. This is called asynchronous taxation, which you can read more about here .
ONLY EVERY THIRD PERSON PAYS CORRECT TAXES ON POLKADOT
The Danish Tax Agency researched how many Danes actually pay correct taxes on polkadot and cryptocurrencies in general. It turns out that 67% didn’t report gains and losses correctly.
That’s a lot of people who have a hard time understanding taxation laws regarding cryptocurrencies. With Lunar Block, you’ll get a document containing all your crypto trades sent to you every year. Here, you can see how much you’ve earned, and how much you’ve lost.
We’ll also send you a guide where you can see exactly which boxes in the annual tax report you need to fill out to report your information correctly.
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