It’s advisable to finalize your significant trades before 2024 concludes. Starting in 2025, platforms such as Coinbase, Kraken, and Binance will automatically send your trading data to the IRS, aligning with how traditional stock brokers report transactions by the April 2026 tax deadline. Currently, U.S. exchanges only report crypto earnings from staking, dividends, or interest to the IRS, leaving capital gains dependent on self-reporting. This practice will be adjusted in 2025.
The change signifies a major shift in how cryptocurrency taxes will be managed. It’s essential to stay informed about these developments because they will affect how you organize your trading activities and prepare for tax season. Maintaining accurate records of your transactions will become even more critical. If you’re not already keeping detailed logs or statements, it’s time to start. Additionally, this may influence the amount of taxes you owe, so consulting with a tax advisor could be beneficial to stay compliant with new regulations.
This upcoming change reflects a growing trend of regulatory scrutiny on cryptocurrencies. As the IRS begins to receive Form 1099-DA from exchanges, it is likely that enforcement and penalties for non-compliance could increase. Being proactive by understanding your tax obligations and perhaps utilizing tax software that specializes in cryptocurrency can help mitigate any surprises. It’s also worth noting that this might prompt international platforms to consider similar reporting measures if trading with U.S. customers is a significant part of their business.