Blockchain accounting and tax software provider NODE40 has released several upgrades to its cryptocurrency reporting software Balance.
NODE40 Balance is a tool for managing blockchain assets, like cryptocurrency, just like any other asset in an investment portfolio. Such tools are becoming valuable as accounting firms around the United States are opening blockchain service lines to serve clients with such investments.
According to NODE40, the new updates were designed to further align the product with the needs of CPAs and other financial professionals. They include:
- NODE40’s SMART 2.0 (Simple Multi-Account Reconciliation Technology) brings cost basis tracking directly into existing wallet and exchange ledgers.
- Foreign Asset Reporting now supports FBAR and FATCA.
- Support for importing data into popular tax filing software like TurboTax, H&R Block, and TaxAct made available with a Tax File Format export.
- Drake Software export added by popular demand. Drake Tax from Drake Software is extensively used by small- to mid-sized accounting firms.
- Closing position reports now provide detailed balance data for each ledger and each currency accurate to the hour on a provided date.
- Ledgers may now be set up to take advantage of the Like-Kind (IRC Section 1031) Exchange provision prior to 2018 along with downloadable IRS form data.
- Generic data export option to download ledger activity represented as a CSV for custom analysis.
- Support for additional exchanges added as well as the option to select file upload or direct API integration.
NODE40 stated that being able to track the cost basis throughout exchanges and custodial wallets that an individual taxpayer or business interacted with was the largest hurdle for CPAs this tax season. Tracking such activity is the key component to preventing overpayment or underpayment of taxes.
Some online cryptocurrency exchanges provide basic worksheets to calculate owed taxes, but most consumers of digital currencies buy, sell and trade on a variety of exchanges. When personally owned custodial (offline) wallets are factored in, the chain of custody grows even more complex. According to NODE40, this very typical use case makes any worksheets or tax reporting from a single exchange nearly useless and almost always incorrect.
“Just about every CPA, accounting and auditing firm we talk with is dissatisfied with how commercial accounting software lacks sufficient features to properly track trade history, cryptocurrency cost basis, and to generate the critical audit trail necessary to backup their tax position,” said Perry Woodin, co-founder of NODE40, in a statement.
“These ongoing developments to NODE40 Balance demonstrate that we are building the industry’s most comprehensive cryptocurrency accounting solution,” added co-founder Sean Ryan. “Having been built from the ground up by engineers with the guidance of CPAs and audit practitioners, our technology and audit methodology is always aligned to meet professional standards. This will be more important as we expect to see more formalized guidelines from the IRS, SEC and other financial bodies soon.”
