Like with individuals, LLC's that have crypto disposals in a given tax year will need an 8949 to include with their yearly tax filings. Generating that 8949 as an LLC will feel very familiar if you've used TaxBit as an individual, but there are a few extra things LLC users need to keep in mind while using our platform.
For a general guide on how to use TaxBit, applicable to both individual and LLC users, check out our guide HERE.
In this article:
- LLC users and the 8949 form
- Keeping your personal and business crypto separate
LLC users and the 8949 form
If you are an LLC user, it’s important to know that TaxBit may not be your one stop shop for crypto tax compliance. LLCs with crypto disposals will need an 8949 to represent those gains or losses, but there may be other documents you need to provide to fully represent your crypto transaction history to the IRS.
In addition to the 8949 we provide, we encourage LLCs using our platform to speak with a tax professional to check whether other forms besides the 8949 will need to be filed as a result of your dealings in crypto.
When you’re setting up a TaxBit account for an LLC, make sure that the name that is displayed on your 8949 matches the name on the exchange accounts those transactions are coming from. This is important because the exchange will be issuing 1099 forms to the IRS under the name on the exchange. In the case of an LLC, that name on your 8949 and on those exchange accounts should not be the name of an individual, but the name should be somehow related to the name of the LLC.
To better understand what an 8949 is and the purpose it serves representing gains and losses of a capital asset, check out our article on the topic found HERE.
Keeping your personal and business crypto separate
To save you unnecessary complexity when preparing your crypto taxes, it's really important that you keep your personal and business crypto transactions separate, and that you create separate TaxBit accounts for each. This means that you should use dedicated exchange accounts and wallets when interacting with crypto owned by an LLC, and not allow the crypto from your personal and business accounts to mix together.
There are some instances where you'll want to move crypto between your personal and business accounts intentionally. In those instances, please reach out to our support team for guidance specific to your situation on how to represent those transactions in both your personal and business transaction data.
Still have questions? Send us an email at firstname.lastname@example.org or chat with us using our live chat feature, and we'd be happy to help!