IRS tax refund in crypto? TurboTax, Coinbase Says Go For It

It’s tax season again, and TurboTax is ready with a message for its 20 million users: This year, you don’t have to settle for another annoying refund check. Instead, the New York Times‘s DealBook today reports that the tax software company is going to give users the option to receive their federal and state refunds in cryptocurrency. To do this, TurboTax partnered with Coinbase, the nation’s largest crypto exchange (also the one New York City Mayor Eric Adams uses to get his salary in Bitcoin and Ether).

The TurboTax website now features a page outlining a direct deposit program that allows users at the end of the tax filing process – when most of them are looking for the route that pays them fastest, gives TurboTax the smallest discount and only give them their refund in US Savings Bonds – a new option to deposit their refund into a Coinbase account, where they can convert government fiat currency into the crypto asset of their choice. TurboTax’s description doesn’t offer much detail, except that this program allows users to “easily report cryptocurrency taxes”, by importing crypto transactions and accurately reporting them on vouchers. tax forms.

TurboTax, whose software is used to file more U.S. taxes than any other source, has recently tried to jump on the crypto bandwagon, and the Coinbase direct deposit deal is its latest push. CoinTracker, a tax product that helps calculate and categorize cryptocurrency taxes by aggregating crypto users’ transactions across all their wallets and exchanges, was added to TurboTax’s platform in 2019 – most “cryptocurrency tax files made easy” above actually refers to CoinTracker. There has been a long-standing fear in the crypto world that at any moment the IRS could arrive with guns blazing, hitting coin holders who failed to pay attention to tax penalties and audits. . This year is also the first since the government amended the tax code to redefine “cash” to include “any numerical representation of value”.

Of course, TurboTax’s partnership also works well for Coinbase, which strives to go beyond its tech-bro base, to a seemingly safe and sane place to park your bi-weekly paychecks, pay your bills, make normal everyday purchases, and now receive your federal and state tax refunds.

This story has been updated to clarify that it is Coinbase that converts refunds to crypto, not TurboTax.