What time zone is used as the cutoff for the beginning/end of a tax year? EST or local?

But what if I'm traveling? Like if I normally live in California but I'm visiting family in New York on New Year's Eve and make a trade at 1am Eastern on Jan 1, but it would've been 10pm Pacific on Dec 31 if I was home. Which one applies?

Your physical location at the time you execute the trade is what matters. If you're physically in New York when you make the trade at 1am Eastern on January 1st, then it's a January 1st transaction for the new tax year. The key concept is where you, the taxpayer, were located when you initiated the transaction. So if you're traveling, use the time zone of your physical location, not your home residence. That's why keeping good records with accurate timestamps and your location is so important for these situations.

Does it work with multiple exchanges? I use like 4 different platforms and organizing everything is a nightmare, especially with staking rewards and all that.

I'm kinda suspicious of these crypto tax tools. How does it know which time zone you were in when you made each trade? And what about privacy? I don't want to upload all my transaction data to some random company.

It works with pretty much all the major exchanges and platforms. I was using Coinbase, Kraken, and Binance, and it imported from all of them without issues. It even handled my staking rewards correctly and categorized them as the right type of income. Regarding privacy concerns, when you set up your profile you can specify your home time zone and any travel periods with different time zones. It's pretty flexible. As for security, they use bank-level encryption and don't store your exchange API keys after the initial import. You can also manually upload CSV files if you prefer not to connect directly. I was skeptical at first too but their security page explained everything pretty clearly.

Wait, so what exactly is this service? How can they get you through to the IRS when the phone lines are always busy? Seems like it would be impossible.

This sounds like a scam. Nobody can magically get you through to the IRS faster. They probably just charge you money to wait on hold, which you could do yourself for free.

It's not magic - they use a system that continuously redials the IRS for you until they get through, then they call you and connect you. Basically it does the hold/wait time for you so you don't have to sit there listening to the hold music for hours. When they get an IRS agent, your phone rings and you're connected directly. No, they don't just charge you to wait on hold. Their system automates the whole redial process that most people don't have the time or patience to do manually. I was skeptical too until I tried it. I got real answers from an actual IRS agent about my specific crypto time zone question without wasting an entire day trying to get through. The YouTube video shows exactly how it works if you're curious.

From what I understand, automated trades would be based on your residence time zone, not the server location. The IRS cares about where *you* are registered as a taxpayer, not where some random server happens to be. But always good to check with a tax pro to be sure.

That makes sense, thanks for the clarification. I was worried I'd need to figure out where all these different exchange servers are physically located, which would be a nightmare. I appreciate the help - will definitely use my home time zone for the automated trades. Might still consult with a tax pro just to be on the safe side, but this gives me a good starting point.

This drove me crazy last year! Most exchanges use UTC in their backend systems but their CSV exports are inconsistent. I ended up having to manually adjust a bunch of transactions that happened around midnight on Dec 31. Some platforms like Coinbase Pro at least note the time zone in their reports, but smaller exchanges are all over the place.

I had the same problem with Kraken and Binance exports showing timestamps without time zones. What I did was cross-reference the timestamps with my email confirmations from the exchanges, which usually include proper time zone info. Also, if you log into your exchange account, the transaction history in the web interface often shows your local time zone even if the CSV export doesn't. It's tedious but helped me sort out which side of midnight my year-end trades actually fell on.

This is really valuable advice about keeping location records! I never thought about noting my physical location for trades, but it makes total sense especially for people who travel frequently. Quick question - when you got audited, did the IRS specifically look for documentation of your location, or was that something you proactively provided? I'm wondering how detailed I need to be with my record-keeping. Like, do I need to save hotel receipts and flight confirmations for every trip where I might make trades, or is it enough to just note the city/time zone in my trading log? Also, thanks for clarifying about DeFi - I use Uniswap and a few other DEXs and was wondering if those transactions would be treated differently since they're on-chain rather than through traditional exchanges.