The Hidden Crypto Tax Crisis
Starting this year, crypto exchanges start collecting your detailed transaction data to share with the IRS. If you’ve been unsure about how to report your crypto on your taxes, you could already be at risk of an audit.
To help clear things up, we surveyed 1,516 American Crypto Traders and discovered the biggest misconceptions about crypto tax.
We found that an overwhelming majority of Americans are making mistakes that put them at a heightened risk of an audit by the IRS.
Here's what you need to know if you want to stay on the IRS' good side this year.
The Reality
The IRS treats cryptocurrency as property, meaning that all crypto transactions—including those on decentralized exchanges (DeFi) and self-custody wallets—are taxable. Taxable events include sales, swaps, staking rewards, transactions using stablecoins, and NFT transactions, all of which must be reported.
- This leaves a significant portion of onchain and DeFi activity at risk of being unreported.
- With the rise of decentralized finance, this misconception can lead to substantial tax liabilities without traders realizing it.
The Reality
Cryptocurrency is subject to capital gains and income tax. Most crypto transactions — whether a trade, swap, staking reward, or NFT sale — trigger a taxable event and must be reported to the IRS accordingly.
However, one common misconception is that transferring assets from one of your wallets to another one of your own wallets is taxable. This is false, self-transfers are not taxable.
- This misconception leads to non-compliance risks, as IRS enforcement continues to grow.
- The implementation of the 1099-DA, and the United States’ commitment to regulating the crypto industry highlights the importance for taxpayers to file accurate tax returns, including crypto activity.
The Reality
Blockchain records are fully transparent. Tax authorities can monitor transactions and trace information across multiple wallets. The IRS requires taxpayers to report all crypto-related income and capital gains, emphasizing the necessity of accurate tax reports.
- Blockchain technology ensures that all transactions are publicly recorded, meaning that regulators can trace activity.
- Compliance efforts by governments and blockchain analytics firms are closing tax loopholes.
Where Investors Learn About Crypto
Crypto traders rely heavily on online communities, news platforms, and influencers for information.
This reliance on peer-driven channels suggests that many traders may be learning tax information from informal, and sometimes unreliable, sources, increasing the risk of misinformation and non-compliance.
The Rising Pressure from Regulators: Global and U.S. Compliance Crackdowns
While United States crypto investors remain unclear on their obligations, regulators are tightening oversight, requiring greater transparency in crypto taxation.
In the U.S., 1099-DA reporting now mandates centralized exchanges to report transactions to the IRS, while CARF, adopted by over 50 OECD countries, sets a global crypto tax standard. These efforts aim to close tax gaps and enforce compliance.
Crypto traders must evolve past outdated assumptions about anonymity and taxation. New regulations mean the IRS has more tools than ever to enforce compliance.
- Shane Brunette, CEO, Crypto Tax Calculator
1099DA Form
Requires centralized exchanges to report user transactions to the IRS.
Crypto Asset Reporting Framework (CARF)
A standardized global initiative signed by 50+ countries to track and tax crypto activity.
Increased IRS Focus on DeFi & Self-Custody
New technologies enable authorities to trace transactions across multiple blockchains.
Behind on your tax? There’s still time to act
With the new data-sharing arrangements starting this year, the age of excuses is over – taxpayers need to get their reporting in order to avoid stiff penalties and fines.
But you still have time to act before the April 15 deadline.
Crypto Tax Calculator is designed to meet the rigorous reporting standards of the IRS.
Simply connect your exchange accounts and wallets and let our software do the rest. It will analyse all of your transactions – including complicated activities like DeFi – and produce a tax report ready for the IRS.
A single plan lets you download reports for all previous tax years, so if you’re behind on your reporting we’re here to help you catch-up.
No guesswork. No headache. No more tax nightmare.
4.8/5 TrustPilot
How Crypto Tax Calculator helps you stay ahead of the IRS
Precision calculations
Our software is specially designed for cryptocurrency and integrates with more than 3500 exchanges, wallets, blockchains and DeFi protocols to give you unparalleled accuracy.
IRS forms
Download specific IRS forms like Form 8949, pre-filled with your transaction data, saving you time and making sure you meet reporting standards.
Cost-basis tracking
Crypto Tax Calculator supports the latest IRS rules for cost-basis accounting and let’s you automatically switch to the new system without having to calculate anything yourself.
Full transaction history
Get reports for all tax years with a single subscription, allowing you to catch-up on any previous years.
Get an IRS compliant tax report in just a few clicks
No credit card required
