Coinbase Taxes 101: How to Report Coinbase on Your Taxes | Gordon Law Group (2024)

FAQs

How do I report Coinbase on my taxes? ›

Use the totals from Form 8949 to complete Schedule D. Download Form 1099-MISC: Download the Coinbase 1099 from your account (if you received one). Report Ordinary Income on Schedule C: Use Schedule C to report ordinary income, such as Coinbase Earn rewards.

Even if you don't receive a 1099-MISC from Coinbase, you are still required to report any income or capital gains/losses on your taxes. Failure to report this income could lead to penalties from the IRS.

You must report income, gain, or loss from all taxable transactions involving virtual currency on your Federal income tax return for the taxable year of the transaction, regardless of the amount or whether you receive a payee statement or information return.

Any cryptocurrency capital gains, capital losses, and taxable income need to be reported on your tax return. You can report your capital gains and losses on Form 8949 and your income on Form 1040 Schedule 1 or Schedule C depending on your situation.

Key takeaways. Coinbase reports Form 1099-MISC for customers who've earned more than $600 of income through means such as staking and referrals. Starting in the 2025 tax year, Coinbase will be required to report all capital gains and losses to the IRS through Form 1099-DA.

Yes, Coinbase reports to the IRS. As of August 2023, Coinbase provides the IRS with Form 1099-MISC for any user who has received crypto income exceeding $600 during the financial year. Crypto income on Coinbase includes Earn rewards, staking, referral rewards, and other forms of income.

US residents have to file their gains/losses from crypto trading and income from crypto earning activities on forms like Form 1040 or 8949; Failure to report crypto taxes in the US can lead to fines and penalties (up to $100K) or harsher consequences if prolonged in time (up to 5 years);

Did you stake any crypto or earn crypto rewards this year using Coinbase? If you earned more than $600 in crypto, we're required to report your transactions to the IRS as “miscellaneous income,” using Form 1099-MISC — and so are you.

If you earn $600 or more in a year paid by an exchange, including Coinbase, the exchange is required to report these payments to the IRS as “other income” via IRS Form 1099-MISC (you'll also receive a copy for your tax return).

Will the IRS know if I don't report my crypto? ›

Crypto tax evasion and crypto tax avoidance are illegal. The IRS likely already knows about your crypto investments. There are two kinds of tax evasion - evasion of assessment and evasion of payment. Evasion of assessment is willfully omitting or underreporting income.

More recently crypto exchanges must issue 1099-K and 1099-B forms if you have more than $20,000 in proceeds and 200 or more transactions on an exchange the exchange needs to submit that information to the IRS.

If you're holding crypto, there's no immediate gain or loss, so the crypto is not taxed. Tax is only incurred when you sell the asset, and you subsequently receive either cash or units of another cryptocurrency: At this point, you have “realized” the gains, and you have a taxable event.

Taxable just means “subject to tax.” Most crypto activities are taxable, but not all. Buying and holding crypto, or minting and holding an NFT aren't taxable events. However, selling and converting crypto are taxable. (See unrealized capital gains and losses below for another example.)

Some cryptocurrency exchanges do not report user transactions to the IRS, including: Decentralized crypto exchanges (DEXs) like Uniswap and SushiSwap. Some peer-to-peer (P2P) platforms. Exchanges based outside the US that do not have a reporting obligation under US tax law.

Eligibility to receive a Form 8949 from Coinbase

Currently, Coinbase One subscribers are eligible for a pre-filled Form 8949. The Form 8949 is available back through tax year 2021.

Go to Federal, then Wages & Income. Under Other Common Income, select Start or Revisit next to Form 1099-MISC. Enter your 1099-MISC info on the Let's get the info from your 1099-MISC screen and Continue. If you're editing a 1099-MISC you already entered, select Edit next to your form.

Certain cryptocurrency exchanges and apps do not report user transactions to the IRS. These include decentralized exchanges (DEXs) and peer-to-peer (P2P) platforms that do not have reporting obligations under US tax law.