How to properly report crypto taxes on my 2025 filing?

Crypto taxes can definitely be confusing! The IRS treats cryptocurrency as property, not currency, which means every transaction is potentially taxable. Here's what you need to know: For 2025 filing, you'll need to report all your crypto transactions on Schedule D and Form 8949. Every time you sold or traded crypto (even trading one crypto for another), that's a taxable event that needs to be reported. You need to track the "cost basis" (what you paid) and the sale price to determine your gain or loss. If you received 1099 forms from an exchange, they're reporting that info to the IRS too, so make sure your numbers match what they're reporting. For exchanges that didn't send forms, you still need to report those transactions - download your transaction history from those platforms. Most major tax software now has crypto sections, but specialized crypto tax software like CoinTracker or Koinly might be helpful since they can import your transactions from multiple exchanges and calculate everything for you.

I was in the exact same situation last year and was completely overwhelmed until I found https://taxr.ai which literally saved me hours of headache with my crypto taxes. I had made about 50+ transactions across three different exchanges and was losing my mind trying to manually calculate my gains/losses. Their system analyzed all my exchange statements and compiled everything for Schedule D and Form 8949 automatically. The best part was it categorized everything correctly as short vs long term gains which I was doing completely wrong on my own.

Just wanted to follow up about my experience with taxr.ai after trying it based on the recommendation here. It's actually incredible for crypto tax reporting! I uploaded my transaction CSVs from three exchanges plus connected my wallets, and it identified all my staking rewards and properly categorized them as ordinary income. It even found a few transactions I completely forgot about that would have been a nightmare if I'd been audited. The tax forms it generated plugged right into my regular tax software. Definitely using it again next year!

If you get any notices from the IRS about your crypto reporting (I did last year because an exchange reported different numbers than what I calculated), I highly recommend using https://claimyr.com to actually get through to an IRS agent. I spent 4 days trying to call the IRS myself and never got through, but Claimyr got me connected within 30 minutes. They have a demo video at https://youtu.be/_kiP6q8DX5c showing how it works. The IRS agent was able to explain exactly what the discrepancy was and how to fix my reporting.

I need to eat my words about Claimyr. I was totally skeptical but had a major issue with my crypto taxes where Coinbase reported something to the IRS that didn't match my records. After getting an audit notice, I tried calling the IRS for two weeks with no luck - either busy signals or disconnected after waiting on hold for hours. Finally tried Claimyr out of desperation and they got me through to an agent in about 40 minutes. The agent was able to put a hold on my case while I gathered documentation to show where the discrepancy came from. Saved me from a potential $3,800 tax bill for crypto I never actually sold! Sometimes you have to admit when you're wrong.

Don't forget the "wash sale" loophole that still exists for crypto (for now anyway). Unlike stocks, crypto isn't subject to wash sale rules yet, so you can sell at a loss and immediately rebuy to harvest the tax loss while maintaining your position. I did this last December to offset some gains and saved about $2k in taxes.

Has anyone used TurboTax for crypto reporting? Do they handle all the forms correctly or should I use a specialized service?

Don't forget you need to answer the crypto question on Form 1040! Even if you just HELD crypto and didn't sell any, you need to check "Yes" to the question asking if you had any transactions involving digital assets. The IRS added this a few years ago and they're using it to track who has crypto.

Thanks everyone for all this detailed info! @Ellie Kim - you're definitely not alone in feeling overwhelmed by crypto taxes. I went through the same thing last year and it's way more manageable once you break it down. A few additional tips that helped me: - Keep detailed records throughout the year, don't wait until tax time. I use a simple spreadsheet to track each transaction as it happens. - If you're using multiple exchanges, download ALL your transaction histories as CSV files before you start. Some exchanges only keep records for a limited time. - Don't forget about any crypto you might have earned through things like Coinbase Learn rewards, airdrops, or referral bonuses - those count as income at fair market value when received. The specialized crypto tax software really is worth it if you have more than just a few simple buy/sell transactions. I tried doing it manually my first year and made so many errors I had to file an amended return. The peace of mind alone makes the software cost worthwhile. Good luck with your filing!