MemeCoinCook.com serves up spicy crypto memes and info for entertainment only—this ain’t financial, investment, legal, or professional advice! Whipped up with AI flair, our content might have some half-baked bits, so DYOR before you dive into the crypto pot. NFA, folks—we’re just tossing out ideas, not guarantees. We make no claims about the accuracy, legality, or tastiness of our posts. Sip our content at your own risk! Check our Terms of Use for the full recipe.
Crypto Taxes Will Blindside Millions in 2025—Here’s Why Most Aren’t Ready
As cryptocurrency continues to gain mainstream traction, the IRS is stepping up its game with notable tax changes for 2025. These new rules will catch many crypto investors off guard, especially those who’ve been casually trading without proper documentation.
The biggest change is Form 1099-DA, a new tax form specifically designed for digital asset reporting. Starting January 1, 2025, every U.S. crypto exchange must track and report your transactions directly to the IRS. This form includes everything from gross proceeds to transaction dates and fair market values.
Form 1099-DA means crypto exchanges will snitch on every Bitcoin trade straight to the IRS starting 2025.
No more flying under the radar—the taxman will know exactly what you’ve been doing with your Bitcoin and Ethereum.
But wait, it gets spicier. The IRS is also mandating wallet-by-wallet accounting, ending the simpler universal method many investors currently use. This means you’ll need to track cost basis separately for each wallet you own.
Moving crypto between wallets? Better document those transfers yourself because the exchanges won’t fully automate this tracking until later. Even seemingly innocent activities like converting crypto between different coins triggers a taxable event that must be reported.
The timeline looks like this: exchanges will send out 1099-DA forms in early 2026 for your 2025 trades. You’ll still calculate your own cost basis for 2025 taxes, but starting in 2026, brokers will handle that too.
Just remember to update your tax certifications (Form W-9 for U.S. folks) or face backup withholding.
These changes mean notably more recordkeeping for anyone who’s been treating crypto like Monopoly money. You’ll need detailed records of every trade, transfer, and transaction by wallet.
The days of guesstimating your crypto gains on TurboTax are officially over. Taxpayers can still choose their preferred accounting method—FIFO, LIFO, or HIFO—for calculating their cost basis in 2025, giving some flexibility in how they report gains and losses.
The IRS isn’t playing around anymore. They’re actively looking for unreported crypto income and planning to make examples of non-compliant taxpayers.
If you’ve been ignoring crypto taxes from previous years, now’s the time to catch up before things get messy.
For the millions of Americans who own crypto but haven’t been keeping proper records, 2025 will be a wake-up call. The complexity of these new requirements might even make you nostalgic for the good old days of simple W-2s.
Time to DYOR on crypto tax software.
