If you’ve ever looked at your crypto wallet and felt confused about what to tell the IRS, you’re not the only one. Many people feel lost when it comes to crypto tax reporting, especially now that the rules keep changing. In 2025, the IRS added a clearer digital asset question on Form 1040 and new reporting rules for brokers and exchanges, so the checks have become even stricter.
This guide makes everything simple. It gives you an easy checklist that shows what the IRS wants, which documents you should keep, and which forms you need to file. Whether you traded, mined, staked, or just held crypto, these steps will help you stay safe this tax season.
Overview:
- The IRS treats crypto as property, not currency, creating taxable events.
- Track detailed records for every crypto transaction, including dates, FMV, and fees.
- Categorise transactions correctly: income, capital gains, and non-taxable transfers.
- Calculate gains, losses, and crypto income using accurate cost-basis methods.
- File required IRS forms like 8949, Schedule D, Schedule 1, and 1099.
How Does the IRS Treats Cryptocurrencies?
As per the American Crypto Tax Laws, the IRS treats digital assets like crypto, and NFTs as property. That means buying, selling, trading, and even earning such assets creates tax obligations. If you use crypto to pay for goods or services, that counts as a taxable event too. Any increase in value between the time you got the crypto or NFTs and the time you used it is considered a gain.
The IRS requires you to report both income and capital gains from crypto. Income can include mining rewards, staking payouts, or payments you receive in crypto. Capital gains arise when you sell or trade crypto for more than you paid for it. The key is tracking everything and knowing what to report.
Also Read: How IRS Taxes NFTs in the US?
The Complete IRS Crypto Tax Reporting Checklist
Now that you know the IRS treats crypto like property, it’s time to build your reporting checklist. This section outlines the tasks you should complete before filing your taxes.
Keep Detailed Records of Every Transaction
Accurate recordkeeping is essential for calculating your tax correctly. This section explains what details to collect and how they help.
Record Basic Transaction Details
Make sure you track the key data for every crypto transaction:
- The date of each transaction (purchase, sale, trade, or earning).
- The type of transaction (buy, sell, swap, or earn).
- The fair market value (FMV) of the asset in USD at the time of the transaction.
These details help you determine your tax obligations and provide evidence in case the IRS requests documentation.
Example: If you traded ETH for BTC on Coinbase, it counts as a taxable event, and you must record the date, value, and trade data. |
Track Your Cost Basis
Your cost basis helps determine your gains or losses:
- Note the exact amount you paid
- Add your transaction or gas fees
- Store these numbers together as your full acquisition cost
Example: If you bought 0.1 BTC for $4,000 and paid a $20 fee, your cost basis is $4,020. |
Save Supporting Documentation
Documentation supports your records and ensures everything is verifiable:
- Wallet addresses that are involved in each transaction.
- An exchange or platform used for trade.
- Screenshots, receipts, or confirmation emails for each transaction.
Example: If you sent USDC from MetaMask to Kraken, keep a screenshot of both wallet addresses to show it was just a transfer. |
Tools like KoinX help by importing data automatically from over 800+ exchanges and wallets, so you don’t need to sort files manually.
Categorize Your Crypto Transactions
Different crypto activities are taxed differently. This section explains how to classify your transactions so that you use the correct tax treatment.
Income Transactions
These are activities where you earn crypto:
- Mining rewards.
- Staking payouts.
- Interest earned from lending platforms.
- Payments or salary received in crypto.
These are treated as ordinary income and taxed based on the value of the crypto at the time you received it.
Example: If you earned 0.5 SOL as a staking reward, you must report its USD value on that exact day. |
Capital Gains Transactions
These happen when you dispose of crypto:
- Selling crypto for fiat like USD.
- Swapping one crypto for another.
- Spending crypto to buy goods or services.
Capital gains tax applies here, depending on how long you held the asset.
Example: If you bought ADA for $500 and later sold it for $900, you made a capital gain of $400. |
Non-Taxable Transactions
These transactions don’t trigger tax but still need to be tracked:
- Moving crypto between your wallets.
- Holding crypto without selling (HODLing).
Example: Sending ETH from your Ledger wallet to MetaMask is not taxable, but you should still record it for cost-basis accuracy. |
Keeping all your transactions in one place can be difficult, hence, KoinX helps you auto-tag these transactions using IRS rules, making sorting much easier.
Calculate Capital Gains and Crypto Income Accurately
Once your transactions are organised, you need to calculate how much tax you owe. This section walks you through each step.
Determine Your Cost Basis
For each crypto asset:
- Use the original purchase price.
- Add any transaction fees.
- This total is your cost basis.
Cost Basis = Original Cost price + Any Fees (Gas fees, Transaction fees or any other fees) |
Calculate Gains or Losses
To find out your capital gain or loss:
- Subtract the cost basis from the sale or trade price.
- If the result is positive, you made a gain.
- If the result is negative, you made a loss.
Capital Gains or Loss = Sale Price – Cost Basis |
Apply the Right Tax Rate
The tax rate depends on how long you held the asset:
- Short Term Gain: If crypto is held for less than 12 months and then disposed of, it’s a short-term gain. It is taxed at your ordinary income rate.
- Long Term Gains: If crypto is held for more than 12 months and then disposed of, it’s a long-term gain. Such gains are taxed at lower rates (0%, 15%, or 20%, depending on your income).
Example: Andrew brought an XRP token for $100 on 26th August 2024. He sold it for $150 on 11th November 2025. In this case, Andrew kept the crypto for over an year and hence his gain of $50 will be categorised under long-term gain, |
Calculate Crypto Income
This applies to staking, mining, airdrops, or payments received in crypto. For income-based transactions:
- Use the FMV in USD on the date you received the crypto.
- Treat this amount as ordinary income on your tax return.
Example: Sara earned 2 ATOM as a staking reward and the price that day was $9 per token, she must report $18 as ordinary income. |
To automate the process, use KoinX, which calculates gains, losses, and income for each transaction. It uses accepted cost basis methods like FIFO, or Specific ID depending on your settings.
Identify and Include All Required IRS Tax Forms
Once you calculate your crypto income and capital gains, the next step is reporting them correctly. This section explains which IRS forms you need to include when filing your tax return.
- Form 8949: Form 8949 lists every sale, trade, or disposal of crypto. You must enter dates, proceeds, cost basis, and the gain or loss for each transaction.
- Schedule D: Schedule D combines all totals from Form 8949. It shows your final short-term and long-term gains or losses for the year on your Form 1040.
- Schedule C: Use Schedule C if you earn crypto from self-employment or business activity. You can also list related expenses to lower your taxable income.
- Schedule 1: Schedule 1 covers income not tied to a business. Airdrops, staking rewards, referral bonuses, and interest earnings must be reported here using FMV.
- Form 1099-MISC: Platforms may send Form 1099-MISC if you earn $600 or more in rewards. Use it to match your reported income with IRS records.
- Form 1099-B: Some exchanges may provide Form 1099-B for crypto disposals. Check that proceeds and cost basis match the amounts on your Form 8949.
- Digital Asset Question on Form 1040: Form 1040 requires a yes-or-no answer about your digital asset activity. You must confirm if you received, sold, traded, or disposed of crypto.
Filing Deadlines and Extensions for Crypto Taxes
You’ve now reviewed your data and determined your income and gains. This part helps you understand when to submit everything.
For the 2025 tax year, the filing deadline is April 15, 2026. If you are a US expat, you have until June 15, 2026. If you need more time, you can file for an extension using Form 4868. This moves your deadline to October 15, 2026.
Remember, filing an extension only gives you more time to submit forms. You still need to pay any taxes owed by the original April deadline. Failing to do so may lead to interest or penalties.
Upcoming IRS Changes for 2025 Filings
While the current rules for reporting your 2024 crypto taxes remain the same, the IRS has introduced new reporting requirements that will take effect for the 2025 tax year. These changes will impact how you report crypto transactions on returns filed in 2026.
New Broker Reporting Requirements
Starting in 2025, digital asset platforms will be required to report user transactions to the IRS using Form 1099-DA. This new form will work similarly to the traditional 1099 forms used in the stock market. It will provide details such as asset type, transaction dates, proceeds, and gain or loss.
If you use an exchange or platform that qualifies as a broker under the new rules, you will likely receive this form for the 2025 tax year. It will help you match your records with the data reported to the IRS. However, you will still be responsible for reporting your complete crypto activity.
Gift Tax Exclusion Increase
In 2025, the IRS will raise the annual gift tax exclusion from $18,000 to $19,000 per recipient. If you give crypto as a gift below this amount, you will not need to file a gift tax return. Couples using gift splitting may give up to $38,000 per recipient without triggering a reporting requirement.
You should still keep records of any gifts, including the date, value, and recipient details, in case you need to support your filing later.
Wallet-Level Cost Basis Tracking
The IRS will begin requiring taxpayers to track the cost basis of digital assets per wallet or account. This means you must calculate your gains or losses based on where each asset was stored, not just the overall value in your portfolio.
To stay prepared, you should maintain separate records for each wallet, including acquisition dates, amounts, and values. Organizing this data ahead of time will help you report accurately when the new rules apply.
How Tools Like KoinX Simplify Crypto Tax Reporting?
If you are looking for a dependable crypto tax software, then KoinX is where your search ends. It simplifies the entire process of tracking, calculating, and reporting your crypto taxes in the United States.
Auto-Sync Transactions from Wallets and Exchanges
KoinX supports seamless integration with 800+ exchanges, blockchains, and wallets. It automatically imports your entire transaction history so you don’t have to do any manual entry.
Auto-Categorisation of Transactions
Once imported, KoinX categorises your transactions according to IRS tax treatment. It identifies income, capital gains, and non-taxable events so you know exactly how each activity should be reported.
Instant Tax Reports for the IRS
With just a few clicks, KoinX generates IRS-compliant, TurboTax ready tax reports, including Form 8949 and Schedule D summaries. These are ready to file or share with your accountant.
Smart Tax Calculations and Error Checks
KoinX applies accurate tax logic and detects common filing errors. It calculates short-term and long-term capital gains, income from staking, airdrops, and more.
Secure and Easy to Use
Your data stays encrypted and safe, and the user interface makes tax filing simple, even if it’s your first time.
Simplify your 2026 crypto tax filing with KoinX, automate reporting and stay IRS-compliant. Get started with KoinX today and make your crypto tax filing stress-free and accurate.
Conclusion
Filing crypto taxes doesn’t have to be stressful. When you follow a checklist, the process becomes more manageable. You stay organized, avoid missing key steps, and reduce your chances of dealing with penalties or audits.
This checklist has shown you how to prepare, track, calculate, and report your crypto activity. By using tools like KoinX, you can simplify even the most complex parts of crypto tax reporting. The IRS continues to refine its approach to digital assets, so staying prepared now helps you in future tax seasons too. Join KoinX today and simplify your crypto tax reporting in the USA.
Frequently Asked Questions
Can I offset my crypto losses against stock market gains?
Yes. You can use crypto capital losses to offset capital gains from stocks or other assets. This helps reduce your total tax liability. After offsetting all gains, you can deduct up to $3,000 in net losses against ordinary income and carry forward remaining losses.
What’s the IRS rule on wrapped tokens for tax reporting?
The IRS generally treats wrapping tokens as a taxable crypto-to-crypto transaction. It may result in a capital gain or loss based on the difference between the original asset’s cost basis and its fair market value at the time of wrapping. Report this transaction accordingly.
How does the IRS treat DeFi lending or borrowing?
If you earn interest or receive tokens through DeFi lending, it is considered taxable income. Borrowing, on the other hand, may trigger capital gains if it involves token swaps. It’s important to track these events and report them using the appropriate IRS forms.
Do I need to track cost basis separately for each wallet?
Yes. From 2025, the IRS will require wallet-level cost basis tracking. You must maintain records for each account or wallet, including purchase price and asset-specific transaction history, rather than combining everything into a single portfolio-wide calculation.
