Posted 2 years ago | by Ben Armstrong
Use Cryptos for Taxes and Support Charity
If you are sitting on some big gains in the form of Bitcoins, or other cryptos, and you have to pay taxes to the US government, you may want to consider donating them directly to a charity.
Here is the deal. If you are holding some tokens that you bought at much lower prices, and you have to pay any kind of tax to the IRS, making a crypto donation to a non-profit could mean dropping your tax bill to zero.
While you should talk to your accountant, it is likely possible to protect most of your income from taxes by donating cryptos to a non-profit. In a sense, you would be monetizing your gains in a way that is far more tax-efficient than selling them or even donating the proceeds of a sale.
Cryptos Can Also be Used Day-to-Day – But be Careful
There are also ways to use your cryptos directly as cash, but depending on where you live, this may be a very tricky way to use your token holdings.
In the USA, tokens are being treated as securities, much like a stock, or commodity. When you sell your tokens into fiat currency, you will have to pay capital gains on any profits. For day-to-day spending, this can become very complex.
It may be better to donate the tokens directly and use the tax-free income to buy the things you need. However, there are many places that have simpler tax laws, and spending cryptos as cash is far easier.
If you want to use tokens directly, Crypto.com offers a range of MCO Visa cards that allow you to spend crypto as cash. It is backed by the Visa network, which means it can be used almost anywhere.
Many Non-Profits Accept Cryptos
If you are living in the USA and would like to make a tax-efficient donation in cryptocurrency, there are some great options for you.
These non-profits accept tokens directly:
- The Water Project
- International Medical Corps
- Save the Children
- Pencils of Promise
- No Kid Hungry
- Rainforest Foundation
Before you decide to donate a large amount of crypto for tax purposes, be sure to talk to an accountant who is crypto savvy. Make sure you get the most out of your tokens and don't let the IRS take more of your money than they should.
The government can print money, you have to earn it.
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