TaxBit, which offers cryptocurrency tax automation software targeted for crypto users, exchanges, and merchants, is announcing today a seed round of $5 million, with some of the industries’ biggest names participating. Investors include Fintech venture firm, TTV Capital, Dragonfly Capital Partners, Collaborative Fund, Winklevoss Capital, Valar Ventures, Global Founders Capital, Table Management, Album VC, who previously led TaxBit’s pre-seed round, and more. This funding is representative of the shift in how Americans are beginning to 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 all 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, has a mission to enable widespread cryptocurrency adoption by automating the regulatory hurdle of tax compliance. Austin Woodward, CEO and Founder of TaxBit (as well as CPA) says, “In such a highly regulated space with so many complexities, TaxBit is needed to remove the burden of proper cryptocurrency tax reporting from the shoulders of crypto users, exchanges, and merchants.” He continues, “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.
Winklevoss Capital Partner, Sterling Witzke, also agrees that, “Navigating cryptocurrency tax laws is a byzantine process. TaxBit’s technology eliminates this confusion and complexity by allowing crypto owners to seamlessly understand the full picture of their tax liability through an intuitive and easy-to-use platform. Solving for this pain point is integral to accelerating cryptocurrency adoption, and we are thrilled to back TaxBit on this mission.”
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 raised to further enhance its products and accelerate customer growth, both in the United States and 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, as is. 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.