What are the risks of not declaring your crypto winnings for taxes?

Did the title give you a cold sweat? 

I understand you ! Personally, I'm more of the type to bury my head in the sand and wake up at the last minute to fill out my declaration. But no matter how much we want to ignore it for as long as possible, the time is coming to roll up your sleeves and declare your earnings for tax. 

Here, we will therefore focus on another scenario. What happens if you forget to report your winnings for taxes? Or what if you make a mistake in your declaration?

In this article, we will see what you risk if you fail to declare your cryptos. And how catch up to avoid trouble as much as possible. 

What are the deadlines for filing taxes in 2022?

First^st zone: Tuesday May 24, 2022 for departments no. 01 to 19 as well as non-resident taxpayers in France;

First^rd zone: Tuesday May 31, 2022 for departments ranging from No. 20 to 54 (including the two departments of Corsica);

First^rd zone: Wednesday June 8, 2022 for departments no. 55 to 974/976.

Do we have to declare our earnings for tax?

To understand why an error in your crypto tax return can cost you dearly, we have to go back to the beginning.

Since 2020, the French tax administration considers holders of cryptocurrencies as classic investors. A recognition which some would have done well without, since it resulted in the establishment of a system to tax profits related to digital assets. 

The capital gains made on your crypto investments are thus imposed at 30 % (17,2% of social security contributions, and 12,8% of taxes). If your tax earnings do not exceed 305 euros, you will not be affected by this reporting obligation. 

But hey, I still hope for you that you exceed, by far, this minimum threshold. If necessary, do not hesitate to check my good tips for earning crypto without having to worry too much!

You will not be affected either. if you do not convertz not your crypto in euros. And yes, without conversion, your real profits cannot be estimated. As a result, they cannot be taxed!

What are the risks in the event of failure to declare crypto (error, forgetting, etc.)?

Now that you know your obligations, let's move on to the most painful part of this article. To know what you risk by not declaring your tax gains, or make a mistake in your declaration…

I'm not going to beat around the bush, the tax administration is not very tolerant in the event of an error or oversight. And these can cost you dearly. Depending on the seriousness of the fault that it considers that you have committed, the sanctions will be more or less severe. 

Let's look at this in a little more detail.

👋 What are the penalties for not declaring crypto accounts? 

If you fail to fulfill your obligation to declare your tax gains, article 1736 General Tax Code (CGI) has planned for you a fine of 750 euros!  For omissions or errors (which you will not have corrected yourself), it increases to 125 euros. 

These two fines are doubled (and therefore increase to 1 and 500 euros) if your undeclared account has a value of more than 250 euros during the year concerned by the declaration. 

👋 What are the penalties for not declaring crypto capital gains?

In the event of an error on your part in calculating your overall capital gain, your crypto taxes will be increased by 10%. This increase may, however, be canceled if you correct your error within 30 days of your declaration. 

If the tax administration considers that your declaration error is not really an error, and rather reveals bad faith, your tax will be increased to 40%. In the event of a repeat attempt at fraud, it will rise to 80%. 

And if, smart guys, you try to slip under the radar of the tax authorities, and you are caught in the act of tax evasion, the criminal risk is even greater. The general tax code provides a sentence of 5 years' imprisonment and a fine of up to €500. The fine can even reach 2 million euros if your profits exceed the initial fine. 

Choosing online software to file your taxes

To avoid a calculation error that could cost you dearly, I advise you toutiliser of crypto tax software. This allows you to make your declarations in just a few clicks. You will have the balance sheets of your transactions automatically.

Believe me, This software will really make your life easier. 

Seek advice from a Crypto Tax Firm to avoid errors

The moral of this article…. Fraud is bad!

More seriously, and you will have understood it, not declaring your earnings tax (or not doing it correctly) can have serious consequences. Consequences that are all the more unfortunate if we consider that it is an intentional fraud. 

So take the time to make your crypto declaration calmly. By helping you with a software to calculate capital gains, you make your job easier.

You'll see, it's a bad time to go through! But you will be able to sleep (and above all continue toinvest in crypto) on both your ears!

The ideal is still to seek advice from specialists in tax matters. It is even recommended whether you are an individual or a professional.

Indeed, depending on your situation, the terms and conditions may be different from one person to another. This is why calling (even if only during a call) a specialist is essential. This can help you make better choices while remaining compliant with the law.

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Disclaimer: This is not financial advice. All information about zonebitcoin