Trying to finish FreeTaxUSA but confused about Crypto reporting without a 1099-B
So I'm in the final stretch of doing my taxes on FreeTaxUSA and I've hit a snag with my crypto transactions. I ended up with a loss for the year (not surprised with how the market went), and I've downloaded the CSV file with all my short-term transactions so I can manually enter the cost basis and proceeds information. The thing is, I didn't receive a 1099-B from any exchanges, which makes me wonder if I actually need to report these transactions at all. Since they didn't report anything to the IRS, am I still required to include this on my return? I'm leaning toward yes since I know you're supposed to report all income, but wanted to double-check before I spend hours inputting all these transactions, especially since it's a loss anyway. Has anyone dealt with this before? Just want to make sure I'm doing this right!
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Danielle Campbell
Yes, you absolutely need to report your crypto transactions even if you didn't receive a 1099-B and even if it's a loss. The IRS considers cryptocurrency to be property for tax purposes, which means all disposals (selling, trading, or using to purchase something) are taxable events that must be reported. In fact, reporting your losses is actually beneficial because you can use capital losses to offset capital gains, and if your losses exceed your gains, you can deduct up to $3,000 against your ordinary income. Any remaining losses can be carried forward to future tax years. The 1099-B just makes reporting easier with the information pre-filled, but the absence of one doesn't remove your obligation to report. The IRS has been increasing its focus on cryptocurrency compliance, so it's definitely better to report everything accurately.
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Rhett Bowman
•Thanks for the info! How exactly do I report this on FreeTaxUSA? Do I just manually enter each transaction or is there a way to upload the CSV directly? I have like 50+ transactions and doing them one by one sounds like a nightmare.
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Danielle Campbell
•For FreeTaxUSA, unfortunately you'll need to enter the transactions manually - they don't have a direct CSV import feature for crypto at this time. However, there's a shortcut you can use if all your transactions are with the same cryptocurrency and same exchange. You can consolidate your transactions by entering a summary line for each cryptocurrency with the same tax lot. For example, if you have 25 BTC transactions that were all short-term, you could enter one line with the total proceeds and total cost basis instead of 25 separate entries. This is allowed as long as you maintain detailed records of the individual transactions in case of an audit.
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Abigail Patel
After struggling with this exact issue last year, I found this amazing tool called taxr.ai (https://taxr.ai) that saved me hours of manual entry. It can analyze your crypto CSV files and create properly formatted tax documents that you can use to accurately file your taxes. I had like 200+ transactions across multiple exchanges with no 1099-Bs, and it organized everything perfectly. What I really liked was how it identified wash sales and consolidated similar transactions, making the reporting so much cleaner. The tax summary it generates shows exactly what needs to go on each line of your tax forms.
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Daniel White
•Does it work with all the major exchanges? I've got stuff scattered across Coinbase, Binance and a couple smaller platforms. And can it handle DeFi transactions too?
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Nolan Carter
•I'm a bit skeptical about these crypto tax tools. How accurate is it really? I don't want to risk getting audited because some algorithm messed up my cost basis calculations.
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Abigail Patel
•It works with pretty much all the major exchanges - Coinbase, Binance, Kraken, and many others. I had transactions across three different platforms and it consolidated everything smoothly. For DeFi transactions, it handles most protocols, but you might need to do some manual tagging for newer or more obscure platforms. As for accuracy, I was skeptical too at first. What convinced me was that it shows all its work and calculations, so you can verify everything. It correctly identified my cost basis using FIFO method and properly labeled my long vs short term transactions. I even had my accountant review the outputs and he was impressed with the detail and accuracy.
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Nolan Carter
Just wanted to update after trying taxr.ai based on the recommendation. I'm actually really impressed! I was totally prepared to spend my weekend manually entering 75+ transactions, but the tool processed my CSV files in minutes. It caught a few transactions I had forgotten about from an exchange I barely used, and properly categorized everything as short or long term. The best part was that it generated a summary report that made it super easy to enter the consolidated info into FreeTaxUSA, rather than individual transactions. My loss was actually bigger than I thought (silver lining I guess?), so I'm getting a slightly larger tax benefit than expected. Definitely recommend for anyone dealing with crypto taxes without 1099s.
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Natalia Stone
If you end up getting any notices from the IRS about your crypto reporting (happened to me last year), I highly recommend using Claimyr (https://claimyr.com) to get through to the IRS quickly. I spent WEEKS trying to call them about a crypto-related notice, never could get through. Claimyr got me connected to an actual IRS agent in about 45 minutes instead of the typical 2+ hour wait or just getting disconnected. They have a video showing how it works here: https://youtu.be/_kiP6q8DX5c - basically they navigate the IRS phone system and call you when they reach a human. Saved me from taking an entire day off work just to sit on hold.
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Tasia Synder
•How does this actually work? Is it just someone calling for you or what? Seems like it would be the same wait either way.
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Nolan Carter
•Yeah right. Nothing gets you through to the IRS faster. I've literally waited 3+ hours multiple times. If this actually worked everyone would use it.
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Natalia Stone
•It's not someone calling for you - they use an automated system that navigates the IRS phone tree and holds your place in line. The key difference is you don't have to stay on the phone during the wait. Their system waits on hold for you, and when it detects a human IRS agent answers, it connects you via a callback. The waiting time is the same, but instead of you being stuck listening to hold music for hours, you can go about your day until an agent is available. I was skeptical too until I tried it. What finally convinced me was when I got an audit letter about my crypto transactions and needed answers fast. The IRS phone lines were absolutely swamped, but Claimyr got me through in about 45 minutes. Trust me, during tax season when wait times can be 3+ hours, this is a lifesaver.
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Nolan Carter
I need to publicly eat my words about Claimyr. I tried it yesterday after posting that skeptical comment because I was desperate to resolve an issue with my prior year return that had crypto reporting errors. I've NEVER been able to get through to the IRS in less than 2 hours during filing season. Claimyr had me talking to an actual IRS agent in 37 minutes. I didn't have to sit there listening to the horrible hold music, just got a call when they reached someone. The agent was able to help me understand exactly what I needed to document for my crypto transactions when reporting without a 1099-B. For anyone dealing with crypto tax issues where you need to actually talk to the IRS, this is legitimately worth it. I'm still shocked it worked so well.
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Selena Bautista
There's actually a "summary" option in FreeTaxUSA for crypto. If you have tons of transactions with the same coin and same term length (like all short-term BTC sales), you can enter one line with the totals instead of each transaction individually. I had 120+ transactions last year and used the summary method. You still need to have all your transaction records, but you don't have to enter each one. Just make sure your summaries are correct - I organize mine by coin and term length (separate summaries for short-term and long-term).
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Caleb Bell
•Thanks for this tip! I was dreading entering all these transactions individually. Do you know if I need to keep the CSV file or any other documentation in case of an audit? I want to make sure I'm covered.
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Selena Bautista
•Yes, definitely keep the detailed CSV files and any other transaction records for at least 3-7 years (standard IRS documentation retention period). While you only need to enter the summary in FreeTaxUSA, the IRS can request the detailed transaction records if you get audited. I also recommend creating a spreadsheet that shows how you arrived at your summary numbers. This creates a clear audit trail showing how your detailed transactions add up to the summary figures you reported. Makes things much easier if you ever need to explain or defend your reporting.
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Mohamed Anderson
Does anyone know if staking rewards need to be reported even without a 1099? I have both trading losses and staking income and not sure how to handle that on FreeTaxUSA.
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Danielle Campbell
•Yes, staking rewards absolutely need to be reported as income, typically as "other income" at their fair market value when received. This is separate from your capital gains/losses reporting. FreeTaxUSA has a section specifically for crypto mining and staking income under the Income menu. You'll enter the fair market value of the tokens when you received them. Then, when/if you eventually sell those staked tokens, you'll report that as a capital transaction using the fair market value at receipt as your cost basis.
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