January 06, 2020

TaxBit Raises Over $5 Million in Additional Funding to Automate Cryptocurrency Taxes

Justin Woodward, Tax Attorney

Justin Woodward
Cryptocurrency Tax Attorney

TaxBit, which offers cryptocurrency tax automation software for crypto users, exchanges, and merchants, announced today a $5 million seed round, with a stellar group of investors composed of Fintech leaders TTV Capital and Valar Ventures, crypto moguls Dragonfly Capital Partners, Collaborative Fund and Winklevoss Capital, and generalist investors Global Founders Capital, Table Management, Album VC, who had previously led TaxBit’s pre-seed round. This funding is representative of the shift in how Americans look at cryptocurrency in regard to taxes and government regulations.

The IRS has been vocal as to properly reporting cryptocurrency taxes. This past summer, the IRS sent out tens of thousands of audit notices to US cryptocurrency traders, followed by releasing new cryptocurrency tax guidance in the fall. To top it off, the IRS included a new question on its 2019 tax return form which requires all US taxpayers to attest whether they acquired, sold, or exchanged cryptocurrency at any point during the taxable year.

TaxBit, founded by CPAs, tax attorneys, and software developers, is on a mission to enable widespread cryptocurrency adoption by automating the regulatory hurdle of tax compliance. In such a highly regulated space with so much complexity, TaxBit is needed to remove the burden of proper cryptocurrency tax reporting from the shoulders of crypto users, exchanges, and merchants. TaxBit’s software and tax experts will accurately handle all of the back-end complexities, while providing users with an intuitive, user-friendly experience on the front-end.”

Salt Lake City-based TaxBit launched its consumer product in January 2019 and has since helped thousands of cryptocurrency users automate their taxes. The company’s consumer product is often referred to as the “TurboTax of crypto”, as users can easily use TaxBit’s do-it-yourself platform to produce all of their required crypto tax forms in minutes.

In 2019, TaxBit also launched its enterprise tax center suite that is now being deployed by cryptocurrency exchanges and merchants. Similar to the tax centers provided by equity trading platforms, TaxBit’s tax center suite facilitates tax compliance for enterprises and their users through a technology driven platform.

TaxBit plans to use the funds to further enhance its products and accelerate customer growth, both in the United States and expand internationally in regions including Canada, UK, and Australia. “For cryptocurrency to proliferate further, an ecosystem of compliance tools must be created,” says Sean Banks, Partner at TTV Capital. “We are very impressed with the TaxBit team and the platform they are building. This technology is fundamental to the adoption of cryptocurrency, as it enables the industry to progress while being compliant with tax regulations worldwide.”

Filing taxes is an intimidating process. With the IRS’ new guidelines and requirements regarding cryptocurrency, it has become even more difficult. TaxBit strives to lessen the stress and simplify the process for merchants, individuals, and exchanges, alike. With a strong and qualified internal team, TaxBit is able to provide accounting software with immutable and secure tax data, at a time when it is most critical.

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