Cashing Out
Hello, I'm new to cryptocurrency trading. I haven't started yet but I plan on doing so soon. I'm just in the process of doing my own research so I understand this more before I put my money into it. I live in the US and I was just curious how taxes work on your capital gains from trading crypto. Can someone fill me in on how that works? Like how would you go about doing your taxes at the end of the year? How much needs to be payed? Should I put X% back in case I have to pay said taxes? Do people go to jail for this type of thing? I just want to make sure I cover all bases so that I am protecting my self. I might be overthinking it, but as of right now I don't understand it at all. I have some friends that say there are ways around the taxes, but I don't want to have to jump through hoops to not get in trouble with the IRS. I also have seen stuff about if you make a purchase under X amount using bitcoin then there are no taxes. Does anyone know how true this is. Like, if I made 10k and wanted to just make a purchase under 5k with some bitcoin, would I have to pay taxes on that or would I be in the clear and not have to report anything on my taxes? Also, should I be keeping track of every single time I but or sell bitcoin in let's say an excel spreadsheet in case that needs to be reported for taxes? That sounds like it would be a nightmare if so. Sorry for all the questions, but any help is greatly appreciated. Thanks!
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