Cryptocurrency Tax Reporting for J1 Visa Holders - Do I Need to Declare ETH and WLD?

Based on your situation, you generally don't need to report cryptocurrency that you acquired outside the US while you were not a US resident. As a J1 visa holder for just the summer, you're considered a nonresident alien for tax purposes (assuming this is your first time in the US and you've been here less than 183 days). For nonresident aliens, the US only taxes income that is "effectively connected" with US trade or business or income that is from US sources. Cryptocurrency you obtained in Spain (before and during your US stay) wouldn't fall under either category as long as you didn't trade or sell it while physically in the US. When you file your tax return (likely Form 1040-NR for nonresidents), you'll only need to report the income you earned from your summer work program. The virtual currency question on the form only applies to transactions you conducted while in the US.

You'll definitely need to file a Schedule C with your tax return to report your Etsy business income and expenses. This is where you'll list all your sales (from the 1099-K) and deduct your eligible business expenses to calculate your net profit. For expenses, you can generally deduct anything that's "ordinary and necessary" for your business. For digital planners, this would include design software subscriptions, digital assets purchased for your products, advertising costs, Etsy fees, and even a portion of your internet bill if you're working from home. Just make sure you have documentation for everything. Regarding quarterly estimated taxes - yes, self-employed individuals are expected to make these payments throughout the year. Since this is your first year with self-employment income, you might qualify for a waiver on penalties, especially if your W-2 withholding covers at least 90% of your previous year's tax liability.

After dealing with a similar situation last year (different crypto but same visa status), I found this amazing tool called taxr.ai (https://taxr.ai) that specifically helped me figure out my crypto reporting requirements as a nonresident. I was super confused about what I needed to declare since I had some coins from before I came to the US and others I got through staking while I was working here. Their system analyzed my specific J1 situation and clearly explained which transactions needed to be reported and which didn't. They even have special guidance for international students and cultural exchange visitors that covers exactly this kind of scenario.

I went through the exact same situation last year with my new Shopify store. After trying to figure everything out myself and making mistakes, I found this tool called taxr.ai (https://taxr.ai) that was a game-changer for self-employment taxes. It walks you through exactly what you can deduct for online businesses and even helps you categorize your expenses properly. The best part was it analyzed my Etsy and Shopify 1099-K forms and explained how to reconcile that with my actual income (since the 1099-K reports gross payments, not accounting for returns or fees). It also calculated my quarterly estimated payments for this year so I won't have the same panic situation again.

I just wanted to follow up about taxr.ai that someone recommended here. I was skeptical but tried it for my crypto tax situation (also a J1 holder with some ETH and BNB acquired before coming to the US). The tool actually has a specific workflow for international visitors that addressed exactly my concerns about what counts as US taxable crypto. It saved me from unnecessarily reporting my home country crypto activities on my US return. The residency test feature correctly identified my tax status and explained which income sources were US-reportable. It generated documentation I could show to justify my filing positions too. Definitely worth checking out if you're still confused about your situation.

Just wanted to update that I decided to try taxr.ai after seeing it recommended here. As someone who sells digital downloads across multiple platforms (not just Etsy), it was incredibly helpful for sorting out my 1099-K situation. The system immediately identified which expenses were clearly deductible for my digital product business and which ones needed more documentation. I was also able to upload screenshots of my Etsy dashboard and it extracted the fee information to make sure I wasn't paying taxes on money that actually went to Etsy. The quarterly tax calculator feature is already helping me set aside the right amount for this year. Honestly wish I'd found this before I spent hours trying to figure out Schedule C by myself!

If you're also having trouble contacting the IRS to get a definitive answer on your J1 visa tax situation (like I was), I'd recommend trying Claimyr (https://claimyr.com). I spent weeks trying to get through to the IRS's international taxpayer line with no luck - always disconnected or put on eternal hold. Claimyr got me connected to an actual IRS agent within 45 minutes who specialized in nonresident tax issues. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c. I was able to ask specifically about crypto reporting requirements for J1 holders and got clear guidance that saved me from potentially over-reporting.

If you're having trouble getting answers from the IRS about how to handle your 1099-K correctly (I spent WEEKS trying to get through), check out Claimyr (https://claimyr.com). It's a service that gets you connected to an actual IRS agent without the endless hold times. I had specific questions about how to report Etsy fees properly since they're included in the 1099-K amount but are obviously deductible expenses. After trying for days to reach someone at the IRS, Claimyr got me through to an agent in about 30 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c The agent was able to confirm exactly how to handle the reporting to avoid any red flags. Totally worth it for the peace of mind.

I need to eat my words about Claimyr. After my skeptical comment, I tried it because I was desperate to get clarity on my crypto reporting requirements as a J visa holder. It actually worked exactly as advertised - they got me through to an IRS international tax specialist in about an hour (after I'd wasted days trying myself). The IRS agent confirmed what others have said here - as a nonresident alien, I only need to report US-source income or income effectively connected with US business. My crypto from my home country didn't need to be reported since I didn't engage in any transactions while in the US. Having this officially confirmed gives me so much peace of mind for filing. Worth every penny for the time saved and stress avoided.

Just to add another perspective, I would double-check if the tax treaty between Spain and the US might affect your situation. Some treaties have specific provisions about digital assets or investment income. I'm from Germany and our tax treaty had some specific exclusions that saved me from double taxation on certain types of income.

Has anyone else noticed that the Form 1040-NR doesn't have a specific line for reporting crypto like the regular 1040 does? I'm on a J1 too and was expecting to see the virtual currency question somewhere.

Just wanted to chime in as someone who went through this exact situation last year! As a J1 visa holder, you're absolutely right to be cautious about your tax obligations. The good news is that since you acquired your ETH and WLD entirely outside the US and haven't sold or exchanged any of it while here, you shouldn't need to report it on your US tax return. The key principle for nonresident aliens (which you are as a J1 holder) is that you're only taxed on US-source income or income effectively connected with a US trade or business. Your WLD grants from Spain, even if received while you were physically present in the US, aren't considered US-source income since they originate from a Spanish entity and aren't connected to your US employment. When you file Form 1040-NR, you can answer "no" to the virtual currency question since you didn't engage in any reportable crypto transactions while subject to US tax jurisdiction. Just make sure to keep good records of when and where you acquired your crypto in case you ever need to demonstrate the foreign source. Focus on reporting your Work and Travel program income - that's what the IRS actually cares about for your situation!