This cryptocurrency question must be answered on your 2022 tax return

<p>You'll want to make sure you answer this question correctly on this year's tax return.</p> <p>Cryptocurrency has exploded in popularity in recent years, catching the attention of all branches of government. President Biden recently signed an executive order directing the federal government to conduct a more thorough investigation into the "risks and benefits of cryptocurrency."</p> <p>Because cryptocurrency is now considered an asset, Uncle Sam is requiring taxpayers to include it on their tax returns for this year.</p> <p>Details on what you need to know about this question on your tax return, as well as how taxes work with cryptocurrency, are available.</p> <p>This year's tax return includes a crypto question.</p> <p>On the first page of this year's IRS 1040 tax return form, you'll find the following question: "At any time during 2021, did you sell, receive, exchange, or otherwise dispose of any financial interest in any virtual currency?"</p> <p>According to Eric Bronnenkant, CFP, CPA, and Betterment's head of tax, this is a "gotcha question" because you can only answer with a simple yes or no. This is due to the fact that so many people have entered the world of cryptocurrency without understanding the tax implications. And if you answer 'no,' and the IRS discovers that you had monetary gains or losses with cryptocurrency, you may be committing perjury by lying on a government document, which is a serious offence.</p> <p>To avoid any problems with the federal government, there are a few details you should be aware of if you should answer yes or no to this question, as obtained directly from the IRS website.</p> <p>You are not required to answer yes if you only purchased cryptocurrency with US dollars or another physical currency and did not sell or exchange it.</p> <p>If you received cryptocurrency in exchange for services or goods, it is considered ordinary income and must be reported on your tax return.</p> <p>And Mamie Wheaton, a LearnLux financial planner, expanded on those circumstances, say