Reporting cryptocurrency on your taxes is changing for the 2026 tax season. This year, the IRS is introducing a new dedicated crypto tax form called 1099-DA for all «digital asset proceeds from broker transactions.»
Prior to tax year 2025, crypto transactions didn’t have their own designated form. Instead, fax filers were prompted to use Form 1099-B, which is generally used to report the sale of securities such as stocks and bonds. Starting in 2026 (for taxable income in 2025), you’ll need to use Form 1099-DA to report transactions involving crypto (or any digital asset).
The IRS says the main goal for creating this new crypto-specific form is to improve compliance and visibility in the digital asset ecosystem. Any crypto transactions made on or after Jan. 1, 2025, must be reported with a 1099-DA. You can expect to receive your 1099-DA form in early 2026. But it’s up to you to still file your income taxes properly, even if this new form isn’t sent to you automatically.
“One of the biggest misconceptions from taxpayers is that if they don’t receive a 1099-DA form that they don’t have to report their crypto earnings on their tax return,” Mark Steber, Jackson Hewitt’s chief tax officer, told CNET.
We’ll walk you through exactly what you need to know to make sure you correctly report your crypto earnings and losses this tax season.
Why crypto recordkeeping is so important for taxes this year
The new 1099-DA tax form is specific to cryptocurrency and digital assets. Since it’s now the standard form for reporting transactions with crypto and related securities, you won’t report digital assets on your taxes in the same way as you did last year (income year 2024).
One benefit of the crypto rule changes is that this new form will standardize the process of reporting all digital asset transactions in one place on your tax return. Now, income from bitcoin and other cryptocurrencies will be filed using a separate form from the one you’ll receive for stocks, bonds and mutual funds.
One downside of this change is that the 1099-DA you receive this year may be incomplete, as it may not include your cost basis, which is needed to calculate your taxable gains and losses. That could result in an overstatement of your taxes.
For example, if your 1099-DA shows $10,000 in gross proceeds but leaves the cost basis blank, the IRS may assume your cost is $0. This could result in you being taxed on the full $10,000 as pure profit. You’re responsible for proving your cost basis to lower your tax bill through your own recordkeeping.
- Gross proceeds (required): Gross proceeds are the amounts you receive when you sell digital assets (minus transaction fees). For the 2025 tax year, brokers are required to report the total amounts you received from any crypto sales, which will show up on your 1099-DA.
- Cost basis (optional): The cost basis is defined by how much you paid for digital assets (including transaction fees). Digital assets associated with the 2025 income year (and prior) are considered “noncovered,» meaning brokers are not required to report what you originally paid for the asset (your cost basis). Mandatory cost-basis reporting applies to all crypto trades made on or after Jan. 1, 2026.
1099-B vs. 1099-DA: What’s the difference?
|
Feature |
Form 1099-B (old) |
Form 1099-DA (new) |
|
Asset type |
Proceeds from a broker or barter exchange (Stocks, bonds, mutual funds) |
All digital assets (NFTs, Cryptocurrency) |
|
Asset code |
Ticker symbol |
Digital Token Identifier (DTI) |
|
Wallet transfers |
Generally nonapplicable |
New box (12b) for transfer-in date |
|
Gross proceeds |
Required |
Required |
|
Cost basis |
Required |
Optional for 2025; Required for 2026. |
While there are some changes and new fields in the 1099-DA form, it’s also fairly similar to the 1099-B form you may have used to report crypto transactions in previous tax years.
Here’s what the 1099-DA form will look like this year. This IRS image is for information purposes only, not for official tax filing.
Who counts as a crypto broker under the new tax rules?
For the new crypto tax rules, the term «brokers» refers to the companies or entities that manage digital assets for you. The IRS defines brokers as those who “take possession of the digital assets being sold by their customers.”
You’ll receive a 1099-DA receipt from a broker. The broker will send the actual form to the IRS. You should expect a 1099-DA if you used:
- Centralized crypto exchanges (e.g., Coinbase, Kraken, Gemini)
- Payment processors (e.g., PayPal, Venmo), if you used crypto to pay for goods or services
- Hosted wallets, which are custodial crypto services that hold your private keys
- Real estate entities, if you used crypto to buy property in 2025
Noncustodial middlemen (e.g., decentralized finance participants and crypto wallets not controlled by exchanges) may not have to report transactions until 2027.
However, even if brokers don’t report DeFi transactions to the IRS, you still have to report any income you made from crypto.
“You will be required to report DeFi activities like staking rewards on your taxes,” says Lisa Greene-Lewis, CPA and TurboTax spokesperson. “Staking rewards, liquidity pool tokens and airdrops are generally reported as ordinary income when you first receive them, so you will need to report them as ‘Other’ income on your taxes.”
Compliance and penalties for crypto tax reporting errors
When you file your income tax return this year, you must make sure you’re accounting for all digital asset transactions that occurred in 2025. If there are any discrepancies between what you and your broker report, you could be fined, even if it’s an honest mistake.
Because 1099-DA is a new form with new reporting rules, it’s a good idea to check the receipt you receive from your broker to confirm it provides an accurate reflection of your digital asset transactions in 2025. Here are a few important dates to keep in mind for crypto tax accounting:
- Dec. 31, 2025: Final day for crypto transactions to be included in the 2025 tax year
- Jan. 1, 2026: Any digital asset transactions on or after this date must have cost basis listed on the 1099-DA form
- Feb. 17, 2026: Brokers must provide taxpayers with a receipt that shows the 1099-DA form information that the broker reported to the IRS
- Mar. 31, 2026: Deadline for brokers to e-file 1099 forms with the IRS
For the 2025 tax year, the IRS is offering brokers some leeway for filing 1099-DA forms. If brokers make a good faith effort to follow rules and send forms in a timely manner, the IRS won’t impose penalties if they can’t get it all done in time.
However, taxpayers still have to report their income from digital assets, even if brokers don’t send out 1099-DA forms. That’s why it’s so important to keep good crypto records in case your broker is late to adopt the new rules.
Strategies for managing the new crypto tax reporting rules
Like stocks, the prices of digital assets rise and fall. If you buy a piece of bitcoin at a certain cost, one-tenth (.10 BTC) for instance, and then you buy one-tenth bitcoin again later, you’ll likely pay two different prices due to the fluctuating price of the asset — even though you bought the same amount both times. These price differences play an important role in reporting taxes. For taxes, each time you buy or sell a bitcoin, or a piece of a bitcoin, it’s considered a «lot.»
In the latest rules for digital assets set by the Department of the Treasury and the IRS, the broker’s default reporting method for assets bought and sold is “first in, first out” (FIFO). This is called the “lot selection,” and it means that the cost basis and gross proceeds for a «lot» will be matched together for the first «lot» in your wallet and the first «lot» out, regardless of how many of the same type of assets exist in your crypto wallet.
In the past, you may have benefited from mixing and matching cost basis and gross proceeds across different «lots» in your various crypto wallets. This is no longer the case. If you want your broker to use a different «lot» selection besides FIFO, you need to let them know at the time of the sale. Some major crypto exchanges have built-in settings that let you specify this.
This rule change is tricky. If you think that your broker made a mistake with your 1099-DA, you should contact the broker immediately and let them know about the mistake.
«Try to determine the source of the discrepancy,» says Andy Phillips, vice president of the Tax Institute at H&R Block. “If the issue relates to inaccurate cost basis or gross proceeds, and the broker will not correct the issue, the investor should report the transaction accurately on their tax return.”
“However, it is vital they maintain records to validate their reported values as the IRS may note the discrepancy in processing.”
Most self-service tax software will support crypto reporting, including all of CNET’s selections for the best tax software for 2026. We recommend TurboTax or H&R Block as our top picks for handling complex tax situations, such as cryptocurrency reporting.
