More than 140 million US taxpayers now have the option to receive their income tax refunds in bitcoin.
Blockchain payments processor BitPay announced yesterday that it had entered into a partnership with tax-related finance solutions provider Refundo that would allow US taxpayers to receive their state and federal tax refunds in bitcoin.
— BitPay (@BitPay) April 30, 2019
Through the integration of BitPay’s Payouts, Refundo’s newest product offering, CoinRT, allows taxpayers to have all or a portion of their tax refund sent to their favorite online, desktop, mobile, or cold storage Bitcoin wallet.
Speaking about the partnership, Rolf Haag, Head of Business Solutions at BitPay, said, “We are thrilled to power Refundo’s CoinRT product. Refundo can now offer their customers a Bitcoin Payout for their tax refunds, meeting their customers’ demand for a more digital choice.”
This new service could prove particularly beneficial to lower-income and underbanked communities.
“Adding Bitcoin was a natural fit for our customers who often do not have traditional checking accounts, pay high check cashing fees and regularly send money internationally. CoinRT enables them to get Bitcoin quickly and easily for one flat fee,” said Refundo CEO Roger Chinchilla.
How to receive your Bitcoin tax refund
The process of receiving a tax refund in bitcoin using CoinRT and BitPay is very straight forward:
- Sign up and create a Refundo Coin account – you will receive a unique routing and account number.
- Provide your Bitcoin wallet address and complete the Know Your Customer (KYC) process.
- Prepare your tax return online using your favorite tax software – but DON’T FILE YET.
- Enter your Refundo Coin account number on your Form 1040 or Form 8888.
- File your tax return with the IRS electronically.
- Once the IRS processes your return, Refundo receives your refund.
- Your tax refund is converted into bitcoin and sent to the wallet address you provided.
Growing crypto support in the tax prep industry
The specific rules regarding the taxation of cryptocurrency in the United States remain murky, despite a recent bipartisan effort by members of Congress to request clarification from the Internal Revenue Service (IRS).
While the IRS dithers and deliberates, an entire industry has sprung up that centers on helping cryptocurrency users and investors accurately keep track of and report their earnings and losses.
In January 2019, Coinbase announced the integration of TurboTax into its platform which allows users to import their transaction data – including any gains and losses – directly into the tax filing software.
Just a few days later, TurboTax was in the spotlight again as the company announced its partnership with CoinsTax LLC to add crypto tax calculations and reporting to its services.
Even more recently, Big Four accounting and professional services firm Ernst & Young (EY) announced last month that it had launched a new tool designed for crypto-based accounting and tax preparation.
Dubbed the EY Crypto-Asset Accounting and Tax (CAAT), the software improves the speed and accuracy of accounting and tax calculations for cryptocurrency transactions and is available to both institutional and individual customers.