Crypto Taxes 2026: What You Must Report

The big change for 2026: Form 1099-DA

Starting with the 2025 tax year (the return you file in early 2026), centralized exchanges like Coinbase, Kraken, and Gemini must send you and the IRS a new form called the 1099-DA. For 2025 transactions it reports your gross sale proceeds only. Cost basis (what you paid) is generally not included yet. Brokers begin reporting cost basis for covered assets bought on or after January 1, 2026. The catch: because the IRS now sees your proceeds, a return that leaves crypto off can trigger a mismatch notice even when you actually lost money.

What counts as a taxable event

You owe tax when you dispose of crypto, not simply when you hold it. Taxable events include:

• Selling crypto for dollars.
• Swapping one coin for another (for example, Bitcoin to Ethereum).
• Spending crypto on goods or services.
• Earning crypto through staking, mining, airdrops, or as payment for work.

Simply buying and holding, or moving coins between your own wallets, is not a taxable sale. Good records of those transfers still matter, because they establish your cost basis.

Capital gains vs. ordinary income

Sales and swaps are capital transactions. You report each one on Form 8949, and the totals flow to Schedule D on your Form 1040. Held one year or less, the gain is short-term and taxed at your regular income rate. Held more than a year, it is long-term and taxed at the lower 0, 15, or 20 percent rates. Capital losses can offset gains plus up to $3,000 of other income, with any remainder carried forward.

Crypto you earn is treated differently. Staking rewards, mining, airdrops, and crypto received for services count as ordinary income at the dollar value on the day you receive it. These rewards usually do not appear on a 1099-DA, so they are easy to forget, but the IRS still expects them (often reported on Schedule 1). When rewards are locked and you cannot control them yet, they are generally taxed once you gain control.

Do not skip the Form 1040 question

Every Form 1040 asks a yes or no digital asset question right near the top, and answering it accurately is required. One bit of good news for our Central Florida clients: Florida has no state income tax, so your crypto gains face federal tax only, not a separate state bill.

Records that make filing painless

The single best thing you can do is keep a running record all year. For every transaction, save the date, the type (buy, sell, swap, reward, or spend), the dollar value at the time, and which exchange or wallet it happened on. Export the annual CSV from each platform you used, and keep a note of any transfers between your own wallets so a move is never mistaken for a sale. Bring those exports to your appointment and the rest goes quickly.

How Zero Fuss Taxes helps

Crypto records get messy. Coins move between exchanges, wallets, and DeFi apps, and the 1099-DA you receive may be missing basis or simply wrong. We guide your intake, help you pull a complete transaction history, reconcile it against the forms your exchanges send, and an experienced, IRS-registered preparer completes and reviews the return. You see clear pricing up front, you approve everything before it is filed, and someone from our office is available to talk it through. We never base our fee on the size of your refund.

Common mistakes to avoid

• Assuming a loss means nothing to report. The IRS still sees the proceeds on your 1099-DA.
• Leaving off staking, mining, or airdrop income because it was not on a 1099.
• Treating wallet-to-wallet transfers as sales, or losing the records that prove they were not.
• Relying on one exchange form when you traded across several platforms.
• Filing without a human review.

FAQ

General information, not tax advice for your specific situation. Rules can change, a human preparer reviews your facts before any return is filed.