Crypto Tax Reporting Just Got Simpler — But the IRS Now Sees More, Too

The IRS and Treasury have finalized new rules forcing crypto brokers to report your transactions — a mixed blessing. These rules streamline your tax filing, but also give the IRS unprecedented insight into your gains and losses.

Why This Matters

1. Tax Filing Becomes Easier

Historically, crypto investors had to manually track trades, compute gains/losses, and file forms like 8949 by themselves. Starting in 2025, exchanges will send users and the IRS a 1099‑DA with your full crypto sales data — making it much easier to file correctly.

2. IRS Visibility Just Got Better

This isn’t just for your convenience — the IRS gains the same gain-loss snapshots you receive. With your info arriving straight from brokers, the accuracy of your tax return becomes harder to dispute.

How the Rule Rolls Out

- 2025: Brokers begin reporting gross proceeds of digital asset sales via Form 1099‑DA. - 2026: Expanded to cover most digital asset transactions. - Note: Bitcoin ETF trades are exempt — treated like stock trades via Form 1099-B.

What Exchanges Think

Coinbase praised the practical rules and protective measures against duplicate reporting, while Kraken remains cautious, citing implementation complexity and broad definitions.

Broader Implications

These new rules stem from the 2021 Infrastructure Bill and signal an intensified enforcement push. Taxpayers will find it harder to underreport, especially high-income individuals seeking to hide gains.

Quick Summary Table

• Reporting starts: 2025 (gross crypto sale proceeds) • Expansion: 2026 (broader transaction coverage) • Form used: 1099‑DA (for crypto sales) • ETF Exemption: Bitcoin ETFs treated like stocks • Taxpayer Benefit: Automatic documentation from brokers • IRS Benefit: Real-time visibility into investor behavior

Conclusion

If you hold or trade crypto, 2025 marks a turning point. Filing taxes will get cleaner with 1099‑DA forms, but so will IRS insight into your returns. Stay accurate, keep records, and consider using tools like Awaken.tax to effortlessly reconcile your filings.