Donating Cryptocurrency to Charity
If you’re into cryptocurrency, you might be saving a lot of it for a later date. However, you can help others with the cryptocurrency you have right now. To help others, you’ll want to donate to charities. You do need to note some things, however, if you decide to donate your cryptocurrency. Address First, you’re going to have to find the address of whatever charity you’re going to send your cryptocurrency to. You’ll have to find that charity’s official website and make sure you get the right address for the exact type of cryptocurrency you’re sending. Once you have an address, you should send a small test payment to that address. Without sending a test payment, you could end up sending all of your money to the wrong place, causing you and the charity to lose all of the cryptocurrency you’ve saved up. Ensure that you find the right address before sending your cryptocurrency to a charity. Tax Deductions When you make a traditional cash donation to a charity, that donation is tax-deductible. This means that you don’t have to pay any income taxes on the money that you gave to a charity. However, you might not know if your cryptocurrency can be used as a tax deduction or not.
According to the IRS, cryptocurrency is classified as property. Like any other kind of property you could give, cryptocurrency is tax-deductible. Just make sure you file out your tax forms properly, declaring the cryptocurrency that you gave to someone else. Transaction Fees Modern cryptocurrency is built with transaction fees in mind. This means that you typically don’t have to pay any transaction fees when sending money using new types of cryptocurrency. However, this is totally different when sending older types of cryptocurrency. When sending older types of cryptocurrency like Bitcoin and Ethereum, you’re forced to consider transaction fees. These fees are included every single time you send cryptocurrency to another address, forcing you to potentially spend tens or hundreds of dollars just sending money to someone else. With these fees, you need to consider how much money a charity organization is actually making. Ensure that you add extra money to your donation if you feel like the transaction fees are going to be very costly.