Libra has announced the imminent release of LibraTax, a new software suite designed specifically for digital currency users.
The California-based software developer said LibraTax allows individuals and small businesses to comply with the latest IRS regulations and file returns reporting bitcoin, XRP and other cryptocurrency transactions. The suite should become available by the end of August.
LibraTax allows bitcoin users to comply with accounting requirements put forth by the IRS earlier this year.
Libra said the software will accommodate “all 2013 and earlier” digital currency users as well as those who filed for extensions in spring 2014.
“Even those who have already filed will want to amend their tax returns once they discover that reportable capital gains may be significantly reduced with optimized accounting options,” the company said in a statement.
Automating bitcoin accounting
Libra pointed out that recent IRS guidance on digital currencies requires that taxpayers report digital currency gains and losses on state and federal returns. The problem with this approach is that it requires a lot of manual calculation, making it extremely time consuming and prohibitively difficult.
LibraTax was developed to automate the accounting process by retrieving the user’s transaction history from the block chain. Once it collects the necessary data it synchronizes the value with the digital currency’s historical fair market value. All types of taxable events are supported, including donations, gifts and income.
This allows the software to dynamically compute gains or losses in a few seconds and Libra says it can output a “tremendously beneficial” report to realize minimized or no reportable gains.
More software on the way
Libra said it is also working on a new product suite designed for small businesses and enterprise needs. There is still no word on a launch date for the new suite, but the company said pre-registration will commence with the public beta.
“Our primary objective is to have approachable, convenient software that simplifies the end-user experience associated with taxpaying – ultimately saving users precious time and money. We’ve accomplished that without a doubt,” said Libra founder and CEO Jake Benson.
Libra has been working on LibraTax for months. The company revealed its plans back in April, when it promised to deliver an accounting suite compliant with IRS guidance in the third quarter of 2014.
At the time, Benson told CoinDesk that compliance is one of the most critical issues surrounding digital currencies. He pointed out that tax software might not be the “sexiest business” in the digital currency industry, but it is one of the most essential ones at the moment.
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