Change to Crypto Reporting is on the Horizon

The tax reporting requirements for cryptocurrency have changed dramatically since 2017 and the IRS has been getting more sophisticated and cracking down on taxpayers.

Prior to 2018, crypto reporting was the wild west. But in recent years, crypto exchanges and trading platforms have been providing investors with some tax information, usually through various 1099 forms. While the 1099s can be helpful, these forms are not specific to crypto and can be missing key information.

The IRS is reportedly working on introducing a brand-new tax form called Form 1099-DA for reporting cryptocurrency and digital asset transactions. The form will be specifically designed to handle the complexities of cryptocurrency and should provide a solution so taxpayers can more easily report their crypto transactions.

Originally, this reporting was supposed to begin with 2023, but the deadline has been extended due to logistical hurdles and delays in the IRS.

A draft form has not yet been released but is expected sometime in 2024.

For more in depth reading:

• https://www.forbes.com/sites/shehanchandrasekera/2022/08/01/the-irs-is-working-on-a-new-tax-form-to-capture-your-crypto-activity/?sh=46fcef516c23

• https://gordonlawltd.com/form-1099-da-what-we-know-so-far/