BITCOIN
ACCOUNTING
GUIDE
Accepting Bitcoin has many benefits like accepting payments with lower fees & getting more customers.
If you use a Hybrid Wallet from our Wallet Guide and automatically sell 100% of the Bitcoin you receive for dollars, you don't need to make any changes to your current accounting.
However, if you keep some of the Bitcoin payments you receive as Bitcoin, you'll need to keep track of a few details for your accounting. This can seem intimidating at first, but is actually quite simple.
Please note: this guide is for informational purposes only and is not to be considered tax advice. If you need tax advice, we highly recommend Satoshi Pacioli Accounting Services, an accounting firm that specializes in Bitcoin acccounting.
TRACKING YOUR
COST BASIS
Tracking your cost basis is going to be the biggest difference between accounting for dollars and accounting for Bitcoin. Even if you view your business entirely in terms of Bitcoin, you need to report the dollar value of each transaction on your taxes.
If you use QuickBooks, you can do this automatically using the Bitcoin Sync plugin.
If you don't use QuickBooks, we recommend Satoshi Pacioli Accounting Services, an accounting firm that specializes in Bitcoin acccounting.
To do this manually, you simply need to keep track of the amount of Bitcoin you received and the dollar value of the Bitcoin transaction on that day. You can view the current dollar price of Bitcoin here. Keep track of this information in an Excel spreadsheet and give it to your accountant. You can also import this data into Excel automatically.
You can also view the historical dollar price of Bitcoin on days in the past, so you don't have to do this every day.
SPENDING OR SELLING YOUR BITCOIN
If you use a Hybrid Wallet from our Wallet Guide and automatically sell 100% of the Bitcoin you receive for dollars, you don't need to make any changes to your current accounting.
If you choose to spend or sell some of the Bitcoin you receive after holding it for a while, you simply need to add the price you sold it for into your Excel spreadsheet that tracks your cost basis.
For example, if you received $100 worth of Bitcoin on January 1st and decided to sell or spend it on February 1st at a new value of $110, you would need to record a $10 capital gain in your accounting.
This can also work the opposite way. For example, if you received $100 worth of Bitcoin on January 1st and decided to sell or spend it on February 1st at a new value of $90, you would need to record a $10 capital loss in your accounting.
I NEED
MORE HELP
Remember, if you use a Hybrid Wallet from our Wallet Guide and automatically sell 100% of the Bitcoin you receive for dollars, you don't need to make any changes to your current accounting.
If you need more help integrating Bitcoin into your business accounting, we highly recommend Satoshi Pacioli Accounting Services, an accounting firm that specializes in Bitcoin acccounting.