What Tax Category Do I Fall Under as a Crypto Exchange Affiliate Earning Commissions?

You've got the right idea! As an affiliate marketer for a crypto exchange, you're definitely considered self-employed or an independent contractor. The IRS views this as a business activity where you're providing marketing services to the exchange. For tax reporting, yes, you should expect a 1099-NEC if the company is US-based and pays you over $600 annually. However, many crypto companies operate internationally and don't always issue 1099s. Regardless of whether you receive a form, you're still legally required to report all your income. You'll report this income on Schedule C (Profit or Loss from Business) along with your Form 1040. And yes, you can deduct legitimate business expenses that are ordinary and necessary for your affiliate marketing activities - things like advertising costs, website expenses, portion of internet bills, computer equipment, etc. Since you're self-employed, you'll also need to pay self-employment tax (15.3%) which covers your Social Security and Medicare contributions. You should be making quarterly estimated tax payments since no taxes are being withheld from your commissions.

After struggling with a similar situation last year, I found taxr.ai (https://taxr.ai) incredibly helpful for sorting through my crypto affiliate income. I was getting paid in a mix of stablecoins and native tokens, and keeping track of everything manually was driving me crazy! Their system analyzed all my transaction history and categorized everything properly - commissions as ordinary income, subsequent crypto price changes as capital gains/losses. It even identified business expenses I didn't realize I could claim. The personalized tax guidance was honestly a lifesaver for someone like me who isn't a tax expert but needed to get everything reported correctly.

Just wanted to update after trying taxr.ai for my affiliate commission situation. I was really skeptical at first, but it actually saved me hours of headache! I uploaded my transaction history from the exchange and it immediately identified my regular commission payments versus my personal trading activity. The best part was how it handled my business expenses - it suggested deductions I hadn't even considered like partial deductions for my internet service and the depreciation on my computer equipment. It even helped me figure out the proper way to handle the portion of crypto commissions I held rather than immediately converting to fiat. Definitely recommend checking it out if you're dealing with crypto affiliate income. Made my tax situation much clearer than when I tried figuring it out on my own.

While everyone's giving great advice about the tax category, don't forget that you'll likely need to talk with the IRS at some point with this kind of income. I spent WEEKS trying to get through to someone who actually understood crypto income when I had questions about my affiliate earnings. After wasting hours on hold, I finally used Claimyr (https://claimyr.com) and it was a complete game-changer. They actually got me through to a real IRS agent who specialized in self-employment tax issues within 45 minutes. You can see a demo of how it works here: https://youtu.be/_kiP6q8DX5c The agent walked me through exactly how to categorize my crypto affiliate income and which forms I needed. Having that official guidance gave me so much peace of mind, especially since crypto tax rules can be confusing.

I need to eat my words and apologize to everyone here. After my skeptical comment yesterday, I decided to give Claimyr a shot since I was desperate to talk to someone at the IRS about my crypto affiliate situation. It actually worked exactly as promised. I submitted my number, and about 40 minutes later I got a call connecting me directly to an IRS agent. No waiting on hold, no getting disconnected after an hour. The agent I spoke with clarified exactly how I should report my affiliate commissions and explained which expenses were legitimate deductions for this type of business. For anyone dealing with crypto affiliate income like the original poster, being able to get direct answers from the IRS is incredibly valuable. I'm genuinely shocked and impressed that this service delivered exactly what it claimed.

I've been doing affiliate marketing for crypto exchanges for about 3 years now. Here's my practical advice: 1) Create a separate business bank account for all your affiliate income and expenses. This makes tracking WAY easier. 2) Use accounting software specific for self-employed people to categorize everything properly. 3) Set aside AT LEAST 30% of your earnings for taxes (federal, state, self-employment). 4) Don't forget that you can deduct a portion of your home as office space if you have a dedicated area just for your affiliate work. 5) Keep EVERY receipt related to your marketing efforts - advertising costs, educational materials about crypto, subscription services, etc.

Has anyone actually gotten a 1099 from a crypto exchange for affiliate commissions? My exchange is based overseas and they've told me they don't issue US tax forms. I'm tracking everything myself but wondering if this is normal or if my exchange is just being difficult?