The IRS has once again extended the tax filing and payment deadlines in most parts of California due to destruction caused by landslides, mudslides, and severe storms. Now those Californians have until October 16th to file, as opposed to the previously announced May 15th date.

The IRS has extended the fourth quarter 2022 estimated tax payment deadline to October 16th. The 2023 estimated tax payments due on April 18th, June 15th, and September 15th, as well as the quarterly payroll and excise tax returns due on January 31st, April 30th, and July 31st, have also been delayed until October 16th. No contact or extension paperwork is necessary to take advantage of the extended time. If taxpayers receive penalty notifications within the postponed period, they should contact the number provided for the penalty to be waived.

If you had any involvement with cryptocurrency or other virtual currencies in 2021, you generally must disclose this activity on your tax return. Form 1040 includes the question, “At any time during 2021, did you receive, sell, exchange, or otherwise dispose of any financial interest in any virtual currency?”

Among other situations, you must check the “YES” box for the virtual currency question if any of the following occurred in 2021:

• You received crypto as payment for property, goods or services.
• You used crypto to pay for property, goods or services.
• You received crypto for mining or staking activities, or as the result of a “hard fork.”
• You purchased crypto through a trading platform or from another individual.
• You sold crypto for cash or exchanged it for another real or virtual currency.
• You gave away or received crypto in a transaction that did not qualify as a bona fide gift.

Because the IRS designates crypto as property, any crypto transaction could have tax impacts.  If you received crypto as income, you should report it just like you would if you had received the payment in cash. Other crypto transactions may involve a taxable capital gain. Capital gains must be reported separately from ordinary income, and may be taxed at different rates.

The U.S. Treasury has significantly stepped up enforcement of cryptocurrency tax rules since 2020, so the IRS urges all taxpayers to fully disclose their transactions.