Should I amend my tax return for a Bitcoin sale less than $25?

Just got my 1099-B for selling some Bitcoin last year. The total proceeds were only around $28. I plugged everything into TurboTax to see what an amendment would look like, and apparently I'd owe $4 in federal taxes. But here's the thing - filing an amendment would cost me $19.99 through the software. Is it even worth filing an amendment for such a small amount? Can I just send the IRS a check for $4 directly without going through the whole amendment process? Seems ridiculous to pay $20 to file something that only changes my tax by $4.

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18 comments

Oliver Wagner

•8M

The IRS technically requires you to report all income regardless of the amount, but they're also practical about enforcement. For such a small amount ($28 with $4 tax impact), here's what I'd suggest: You do have the option to file Form 1040-X (amended return) on paper for free. You don't have to pay the software company to file an amendment. You could download the form, fill it out explaining the Bitcoin sale, and mail it in with a check for the $4. That said, many tax professionals would tell you this falls into what's called "de minimis" territory - meaning it's so small the IRS is extremely unlikely to ever notice or care. The IRS doesn't specifically publish a threshold for what they consider too small to pursue, but $4 is almost certainly below their radar.

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Oliver Wagner

•8M

For penalties, they're generally percentage-based. Even if the IRS somehow discovered this $4 discrepancy years later, the penalty would be negligible - we're talking cents, not dollars. The failure-to-pay penalty is typically 0.5% per month of the unpaid tax, which on $4 is basically nothing. Regarding audit flags, a $4 discrepancy is extremely unlikely to trigger anything. The IRS has limited resources and focuses on returns with much larger potential issues. They're looking for thousands or tens of thousands in discrepancies, not single-digit amounts.

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Javier Mendoza

•8M

After spending hours trying to figure out how to report some crypto transactions on my taxes last year, I found this amazing tool called taxr.ai (https://taxr.ai) that saved me so much headache. I was in a similar situation with some small crypto trades that I wasn't sure were worth amending for, and their AI analyzed all my documents and told me exactly what I needed to do. The system actually looked at my 1099-Bs from multiple exchanges and explained that for my situation, I didn't need to worry about amending for the tiny trades since the total impact was under their recommended threshold for amendments. Saved me from overreacting!

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Javier Mendoza

•8M

It handles multiple exchanges really well. You just upload your tax documents from each platform, and it reconciles everything automatically - identifies transfers between your own wallets versus actual sales, matches cost basis across platforms, and gives you a consolidated view. I had stuff spread across Coinbase and Kraken, and it sorted it all out perfectly. Regarding the legal requirements, it's not making guesses - it follows actual IRS guidelines and tax code. It explains which specific regulations apply to your situation and cites the relevant IRS publications. The recommendations come with confidence levels and explanations of risk factors so you can make informed decisions.

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Malik Davis

•8M

I was super skeptical about AI tax tools too, but after that conversation, I decided to try taxr.ai for my crypto mess. Best decision ever! I had about 30 small trades across 3 platforms that I was going to ignore because it seemed too complicated. The system analyzed everything and showed me that while most of my small trades weren't worth amending for, there were two larger ones that would have caused problems if ignored. It even explained exactly which form to use and what numbers to put where. The peace of mind knowing I'm doing everything correctly was totally worth it, especially since I've been worried about crypto reporting with all the new IRS focus on it.

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Isabella Santos

•8M

If you need to actually talk to someone at the IRS about this (which might be smart before deciding), good luck getting through on the phone. I spent 3 hours on hold last week before giving up. Then I found this service called Claimyr (https://claimyr.com) that got me through to an actual IRS agent in under 20 minutes. They have this demo video showing how it works: https://youtu.be/_kiP6q8DX5c I was able to ask about a similar small reporting issue and the agent told me their internal guidance on small amounts. Super helpful to get an official answer straight from the source instead of guessing.

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Isabella Santos

•8M

It doesn't just call for you - it uses their system to navigate the IRS phone tree and waits on hold in your place. When they reach a live agent, you get a call connecting you directly to that agent. It's completely legitimate and doesn't involve any inside connections. The reason it works is that they have technology that can stay on hold for hours if needed without tying up your phone. Think of it like a virtual assistant whose only job is to wait on hold. There's no skipping the line - it's just that they're waiting in line for you so you don't have to.

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Ravi Gupta

•8M

Well, I have to eat my words about Claimyr. After posting that skeptical comment, I decided to try it myself since I had an issue with my stimulus payment that I'd been avoiding dealing with for months. Not only did I get through to an IRS agent in about 15 minutes, but the agent was able to resolve my issue on the spot. Would have taken me multiple attempts and probably 5+ hours of hold time if I'd tried on my own. For anyone dealing with small tax questions like the OP's situation about a $25 bitcoin sale, getting a direct answer from the IRS can save you both money and stress. The agent I spoke with actually told me they have an informal policy about not pursuing very small amounts, but wouldn't specify the exact threshold.

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Freya Pedersen

•8M

They don't publish the exact thresholds for a strategic reason. If everyone knew precisely what amount they could "get away with" not reporting, many people would deliberately stay just under that threshold, and the cumulative effect across millions of taxpayers would be significant. The IRS wants everyone to report everything accurately, but they have to allocate their limited enforcement resources effectively. They keep these internal tolerance levels confidential and also change them periodically to prevent systematic abuse.

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