Need help with crypto reporting on FreeTaxUSA without a 1099-B - do I need to report losses?
So I'm trying to wrap up my taxes on FreeTaxUSA and I've hit a roadblock with my crypto situation. I had some trading losses last year (ugh, who didn't?) and I didn't receive any 1099-B forms from the exchanges. I went ahead and downloaded the CSV file with all my short-term transactions so I have the cost basis and proceeds info. What I'm confused about is whether I actually need to report these losses at all since the exchanges didn't send anything to the IRS. Part of me wants to just skip it since it would lower my tax bill, but I don't want to cause problems later. The total amount is definitely a loss (don't remind me lol), and I have all the numbers ready to input. Just wondering if it's mandatory to report crypto losses when there's no 1099-B involved? Thanks for any help!
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Pedro Sawyer
Yes, you absolutely need to report your crypto transactions even without receiving a 1099-B. The IRS requires you to report all capital gains and losses from virtual currency transactions regardless of whether you received tax forms. The good news is that reporting those losses can actually benefit you! Capital losses can offset capital gains, and if your losses exceed your gains, you can deduct up to $3,000 against your other income. Any unused losses can be carried forward to future years. In FreeTaxUSA, you'll want to enter each transaction manually using your CSV data, making sure to include the correct cost basis and proceeds for each sale. Don't skip this step - it's better to report everything properly than risk issues down the road.
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Mae Bennett
•Quick question - do I need to enter EVERY single transaction if I have like a hundred small trades? Or is there some way to consolidate them? Also, what happens if my cost basis records aren't perfect for some of the older purchases?
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Pedro Sawyer
•You can consolidate similar transactions if they have the same acquisition date, sale date, and similar characteristics. FreeTaxUSA should allow you to group them as a single entry. Just make sure your total cost basis and proceeds are accurate. For imperfect cost basis records, you should make a good faith effort to determine the correct amounts. You might need to look at historical price data or bank statements. Document your methodology in case of questions later. Remember, the IRS allows different calculation methods like FIFO (First In, First Out), but you need to be consistent with your approach.
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Beatrice Marshall
I've been in this exact situation and found taxr.ai really helpful for organizing crypto transactions. I had hundreds of trades last year with no 1099-B, and trying to manually enter everything in FreeTaxUSA was a nightmare until I discovered https://taxr.ai. It automatically imports and categorizes all your crypto transactions from various exchanges, calculates gains/losses correctly, and generates a report you can just upload to FreeTaxUSA. Saved me hours of headaches trying to figure out which transactions to report and how to calculate everything properly. The best part was it found some wash sales I would have missed that actually improved my tax situation.
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Melina Haruko
•Does it work with all exchanges? I use some smaller ones that aren't mainstream. Also, how does it handle transactions between wallets vs actual buys/sells?
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Dallas Villalobos
•I'm a bit skeptical about giving my crypto transaction data to some random website. How secure is it? Can it really handle DeFi transactions properly? Those are always the ones that mess me up.
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Beatrice Marshall
•Yes, it works with pretty much all exchanges including smaller ones - you can directly import from major platforms or upload CSVs from any exchange. It's actually really good at distinguishing between actual taxable events and non-taxable transfers between wallets. For security concerns, they use bank-level encryption and don't store your exchange API keys after the initial import. And yes, it actually specializes in handling complex DeFi transactions like liquidity pools, staking rewards, and even those confusing swaps that other tax software misclassifies. That's actually what made me try it in the first place.
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Dallas Villalobos
Honestly I'm shocked at how well taxr.ai worked for my crypto mess. After posting that skeptical comment, I decided to give it a try since I was desperate with my filing deadline approaching. Uploaded my transaction history from 3 different exchanges plus some MetaMask activity that I thought would be impossible to sort out. The system automatically identified which transactions were taxable vs just transfers between my own wallets, calculated everything perfectly, and generated a report I could just import to FreeTaxUSA. Found some losses I didn't even realize I could claim! Definitely reporting my crypto correctly this year instead of the guesswork I did last year.
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Reina Salazar
If you're having issues with the IRS about past crypto reporting or worried they might question your current filing, I highly recommend using Claimyr to actually get through to a human at the IRS. I was in audit hell over some crypto from 2 years ago that I reported incorrectly. Called the IRS dozens of times but couldn't get past the automated system. Found https://claimyr.com through a friend and watched their demo at https://youtu.be/_kiP6q8DX5c - they basically hold your place in the IRS phone queue and call you when an agent is about to pick up. Got through to a real person in the crypto department who actually helped resolve my case instead of waiting 4+ months for mail responses.
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Saanvi Krishnaswami
•Wait this actually works? How exactly do they get you through the IRS phone tree? I've been trying to talk to someone for WEEKS about my crypto situation.
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Demi Lagos
•Sounds like a scam to me. No way some third party service has special access to the IRS. They probably just automate the calling process which you could do yourself with an auto-dialer.
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Reina Salazar
•They don't have any special access or relationship with the IRS - they just have a system that calls the IRS and navigates through all the prompts and holds your place in the queue. When they detect a human is about to answer, they connect the call to your phone. It's totally legit and just saves you from sitting on hold for 2+ hours. The real value is that their system knows exactly which options to select in the complex IRS phone tree to get to the right department for your specific tax issue. I was able to specifically request the crypto reporting department which I didn't even know existed before.
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Demi Lagos
I have to eat crow here. After posting that skeptical comment about Claimyr, I was still desperately trying to get IRS help with my crypto reporting issues, so I figured what the hell, might as well try it. Signed up, explained my crypto reporting problem, and within 40 minutes got a call connecting me to an actual IRS agent who specializes in digital asset reporting. Turns out I had been selecting all the wrong options in the phone tree for weeks! The agent walked me through exactly how to report my situation in FreeTaxUSA. Definitely worth it just to stop the anxiety of wondering if I was doing it right. Sometimes admitting you're wrong feels pretty good!
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Mason Lopez
FYI - for anyone using FreeTaxUSA for crypto reporting, look for the "Capital Gains" section, then select "I'll enter my transactions manually" when it asks about your 1099-B forms. You can then enter each transaction with the date acquired, date sold, proceeds, and cost basis from your CSV file. Make sure you classify them correctly as short-term or long-term! That's a common mistake people make and it can significantly impact your tax situation. Short-term is for anything held less than a year and is taxed at your normal income rate.
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Gemma Andrews
•Thanks! Is there a way to attach the CSV file directly or do I have to manually type each transaction? I have about 74 trades to report from last year.
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Mason Lopez
•Unfortunately FreeTaxUSA doesn't have a direct CSV import feature for crypto transactions. You'll need to enter them manually if you're not using a third-party tool like some others mentioned. If you have a lot of transactions, you might want to consolidate them by date if they're similar (like multiple small trades on the same day with the same cryptocurrency). FreeTaxUSA has a "Form 8949" checkbox that lets you indicate you're reporting summary information rather than each individual trade. Just make sure your totals are accurate.
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Vera Visnjic
Quick warning from someone who learned the hard way - don't skip reporting your crypto even with losses and no 1099-B. I thought since I lost money and received no forms, I didn't need to report anything last year. The exchange ended up sending information to the IRS later and I got a CP2000 letter about unreported transactions. Had to file an amended return and pay interest on the difference (though in my case it was actually a refund since reporting the losses properly reduced my tax bill).
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Jake Sinclair
•What information did the exchange send if they didn't give you a 1099-B? I thought smaller exchanges weren't required to report?
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