IRS tax refund in crypto? TurboTax, Coinbase say go for it

It’s tax season again, and TurboTax is ready with a message for its 20 million users: This year, you do not have to settle for another boring refund check. Instead, the New York Times‘s DealBook reports today that the tax software company is going to give users the option of receiving their federal and state refunds in cryptocurrency. To do this, TurboTax has teamed up with Coinbase, the largest crypto exchange platform in the country (also the one that New York Mayor Eric Adams is using to get his salary in Bitcoin and Ether).

TurboTax’s website now boasts a page describing a direct-deposit program that allows users at the end of the tax-filing process—when most of them are hunting for the option that pays them the fastest, gives TurboTax the smallest cut, and doesn’t hand them U.S. savings bonds—a new option that automatically converts their refund in U.S. dollars into the crypto asset of their choice. TurboTax’s description doesn’t offer very many details, other than saying this program lets users “file cryptocurrency taxes the easy way,” by importing crypto transactions and accurately reporting them on the right tax forms.

TurboTax, whose software is used to file more Americans’ taxes than any other source, has been trying to hitch itself to the crypto bandwagon lately, and the Coinbase direct-deposit deal is its latest push. CoinTracker, a tax product that helps calculate and file cryptocurrency taxes by aggregating crypto users’ transactions across all of their wallets and exchanges, was added to TurboTax’s platform in 2019—most of the “file cryptocurrency taxes the easy way” spiel above is actually referring to CoinTracker. There’s a long-running fear in the crypto world that any minute the IRS could come in guns a-blazing, hitting coin holders who weren’t careful with tax penalties and audits. This year is also the first since the government amended the tax code to redefine “cash” to include “any digital representation of value.”

Of course, TurboTax’s partnership also works well for Coinbase, which is busy attempting to move beyond its tech-bro base, into a seemingly safe, sane place to park your biweekly paychecks, pay bills, make normal everyday purchases, and now, receive your federal and state tax refunds.

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