Lukka debuts DIY crypto tax prep product
Lukka, which makes blockchain products for the cryptocurrency ecosystem, has debuted a do-it-yourself tax preparation product for taxpayers reporting cryptocurrency assets on IRS Forms 1040 and 8949.
LukkaTax will be available for the 2019 tax season. LukkaTax was developed in partnership with CPA.com, the technology arm of the American Institute of CPAs. The alliance, announced in December, will first focus on building crypto asset solutions specifically for accounting firms and sole practitioners to support taxpayers who prefer to work with CPA firms, rather than handle tax preparation needs themselves. The first product released under the alliance is the virtual currency tax preparation tool, LukkaTax for Professionals. Practitioners purchase and use the tool to complete crypto data processes not supported by their existing tax preparation software solutions.
The new DIY software, available mid-January, leads taxpayers through a guided experience so they can calculate taxable gain or loss on crypto investments. LukkaTax evolved from LibraTax, Lukka’s commercial crypto tax calculator released in 2014, and is built to complete crypto data collection, enrichment, and calculation processes not supported by traditional tax preparation software solutions.
2019 will be the first year that the IRS will explicitly ask taxpayers to document their cryptocurrency — or "virtual currency," as the IRS calls it — activity, prioritizing this question to the top of its new IRS Form 1040 Schedule 1. For those with cryptocurrency activity, transactional details must be itemized on IRS Form 8949 which includes cost basis, proceeds, and itemized gain or loss. If taxpayers did not report their crypto from previous years, it can be done so now by amending prior year returns, which can be done via LukkaTax.
Lukka offers other crypto-focused products that complement its DIY tax prep product. Lukka Prime is a fair market, value-based crypto asset pricing methodology; and Lukka Reference Data eliminates inconsistencies between constantly changing crypto ticker and pair mappings traded across various crypto exchange platforms.
“Lukka is bringing institutional-grade tax preparation products to all consumers with scalable and secure tools that have guided experiences and are incredibly easy to use,” said Jake Benson, founder and CEO of Lukka, in a statement. “Considering the intense IRS focus on compliance and lack of accuracy in prior year reporting, we believe that the do-it-yourself taxpayer requires a purpose-built crypto tax product they can trust will comply with IRS requirements; LukkaTax meets that need.”
LukkaTax will be available in mid-January to support the 2019 tax season, as well as prior tax years. The product is currently available for pre-purchase at lukkatax.tech for $9.95 to taxpayers who purchase prior to Jan. 15, 2020, and $19.95 thereafter.