Multinational professional services firm Ernst & Young (EY) announced today the release of the EY CryptoPrep, an online service for helping users calculate crypto trading gains and losses for tax reporting purposes.
It’s another step on the road of prestigious financial institutions diving deeper into the world of cryptocurrencies and using their expertise to bridge the compliance gap.
EY CryptoPrep uses a step-by-step process to import and collect basic information about the user’s activity across all major crypto exchanges and any off-exchange activity. Once collected, the service compiles the information into a downloadable draft 8949 tax form. EY CryptoPrep uses the same methodology applied to EY’s commercial clients, ensuring the accounting follows the latest IRS guidance on cryptocurrencies.
"Our clients increasingly hold and trade crypto assets, creating the need for an innovative solution to address the evolving complexity around filing crypto taxes," EY Americas Vice Chair of Tax Services Marna Ricker said in a release.
"The EY Foundry, our internal corporate venturing unit, created EY CryptoPrep to modernize the crypto tax accounting process."
As one might anticipate, having a professional services firm prepare your crypto taxes doesn’t come cheap. Prices start at $49 to account for up to 20 transactions, increasing to $399 for accounting between 101 and 999 transactions. For professional traders and other users beyond that threshold, EY offers individually priced accounting services for preparing complete tax returns including crypto considerations.
EY is far from alone in recognizing the need for expert-led assistance in the crypto tax realm, and the opportunity that this presents for tax services and software companies. Earlier this year, the Winklevoss Capital-backed TaxBit launched what it dubs the “TurboTax of crypto,” which similarly helps its clients prepare an IRS 8949 cryptocurrency tax form.
As for EY, it’s not the first time that the company has made an effort to provide services to the crypto community. In December last year, the firm released its Smart Contract Analyzer, a tool designed to enable users to check for more than 250 potential vulnerabilities in smart contracts, including coding errors and the presence of malware.
It’s all part of the firm’s broader goal of getting major businesses to make better use of the Ethereum blockchain.