Coinbase and TurboTax have announced a new partnership that will allow users to automatically convert tax refunds from state and federal governments into crypto.
The tax software giant and the crypto marketplace have partnered in a bid to try and get more users interested in investing.
The deal creates a new direct deposit program for TurboTax users within Coinbase, automatically converting dollars into over 100 different cryptocurrencies, from stablecoins to yield-bearing assets so they can trade or earn interest.
Tax refund cryptocurrency
Coinbase says there will be no trading fees, and has created a new section on its website to guide users through the process.
“With tax season officially underway, customers expecting a refund might be wondering what to do with their extra cash,” says Coinbase’s Bipul Sinha.
“Now, Coinbase customers can get tax refunds automatically deposited into Coinbase as USD, where it can be immediately converted into crypto, when they file with TurboTax. Customers will receive their full refund and can choose to save, invest, or spend it.”
Interested users can kick-start the process by filing their taxes from the Coinbase section of the TurboTax website, where they can login using their TurboTax credentials and complete their tax return.
After your tax refund has been calculated, TurboTax will ask you to enter account details to receive your refund – where they can select the Coinbase option to set up a direct deposit account.
The company says it is particularly looking to appeal to those who are considering using cryptocurrency to boost their savings. It quotes a recent National Retail Federation study which found nearly two-thirds (62%) of US taxpayers who expect to receive a refund this year plan to put the money towards savings, with just 27% planning to use it on overday spending.
There are a few limitations and risks, most notably that the value of cryptocurrencies fluctuates far more wildly than USD. If you really need the money to be safe, this likely isn’t a smart option. Having said that, there is no upside without risk.
Coinbase isn’t the only recent synergy for Intuit, which operates TurboTax. Back in September 2021, the company acquired Mailchimp for $12 billion in cash and stock.
The partnership comes shortly after Coinbase also launched the ability to take pay checks in cryptocurrency. New York City Mayor Eric Adams was one of the first adopters, but saw his pay fluctuate wildly – although for what it’s worth, Adams actually takes his pay checks, around $9,924.66 gross, in USD still, but Coinbase then converts this to BTC and ETH.