Despite the 2018 tax season coming to an end, NODE40, the blockchain firm behind the Balance cryptocurrency reporting software, has today launched a number of accountant-focused upgrades that CPAs requested following a fairly arduous 2018 crypto tax filing season.
“Just about every CPA, accounting and auditing firm we talk with is dissatisfied with how commercial accounting software lacks sufficient features to properly track trade history, cryptocurrency cost basis, and to generate the critical audit trail necessary to back up their tax position.”
Over the past few months, Balance has undergone significant advancements to make it more aligned with the needs of CPAs and other financial professionals:
- Node 40’s innovative SMART 2.0 (Simple Multi-Account Reconciliation Technology) brings cost basis tracking directly into an existing wallet and exchange ledgers.
- Foreign Asset Reporting made simple with support for FBAR and FATCA.
- Support for importing data into popular tax filing software like TurboTax, H&R Block, and TaxAct made available with a Tax File Format export.
- Drake Software export added by popular demand. Drake Tax from Drake Software is extensively used by small to mid-sized accounting firms and consistent winner of CPA Practice Advisor’s Readers Choice Awards annually since 2004, Node40 is delighted to offer this integration.
- The closing position reports now provide detailed balance data for each ledger and each currency accurate to the hour on a provided date.
- Ledgers may now be set up to take advantage of the Like-Kind (IRC Section 1031) Exchange provision prior to 2018 along with downloadable IRS form data.
- Generic data export option to download ledger activity represented as a CSV for custom analysis.
- Support for additional exchanges added as well as the option to select file upload or direct API integration.
Being able to track cost basis throughout exchanges and custodial wallets that an individual taxpayer or business interacted with was the largest hurdle for CPAs this tax season. Tracking such activity is the key component to preventing overpayment or underpayment of taxes.
Some online exchanges provide rudimentary worksheets to calculate taxes owed but most consumers of digital currencies buy, sell, and trade on a variety of exchanges. When personally owned custodial (off-line) wallets are factored in, the chain of custody grows even more complex. This very typical use-case makes any worksheets or tax reporting from a single exchange nearly useless and almost always wildly incorrect.
“These ongoing developments to NODE40 Balance, demonstrate that we are building the industry’s most comprehensive cryptocurrency accounting solution. Having been built from the ground up by engineers with the guidance of CPAs and audit practitioners, our technology and audit methodology is always aligned to meet professional standards. This will be more important as we expect to see more formalized guidelines from the IRS, SEC and other financial bodies soon.”