While it is not currently required for businesses to provide tax forms to their end users in the US, it's believed that this will be made compulsory in the coming years. In order to prepare for that eventuality, as well as to make filing personal taxes easier for crypto users, many businesses have begun providing helpful tax forms to their customers.
What form(s) might I be offered?
There are two forms you might receive that will help you disclose your crypto activity to the IRS, and potentially other domestic tax agencies. You may be offered one or both of these, depending on your transaction activity.
1099-MISC
For US taxpayers, the IRS requires companies that make certain types of payments to provide the recipient of such payments and the IRS with a 1099-MISC. This form provides information for a wide range of income payments such as crypto interest, referral bonuses, and other income.
If you’ve earned $600 or more in a calendar year in crypto interest or bonuses, a 1099-MISC may be made available to you by the platform that issued your payments. You are then responsible for reporting the income on the 1099-MISC when filing your tax return.
1099-B
The US tax form 1099-B provides transactional information detailing gains and losses from disposing of assets. At this time, cryptocurrency is classified as property (a capital asset). The information on Form 1099-B helps you fill out Schedule D and Form 8949.
When you sell something for more than it cost you to acquire it, the profit is a gain and may be taxable. On the other hand, if you sell something for less than you paid for it, then you may have a loss, which you might be able to use to reduce your taxable gains.
For US taxpayers, unlike the 1099-MISC and reportable income, there is no minimum threshold for reporting capital gains and losses. If you incurred even a single capital gain or loss for the year, this should be reported. A record of which may be made available to you by the platform you transacted on.
How do I know if I'll receive a form?
If you engaged in qualifying transactions on a platform that is using Zero Hash's Tax as a Service (TaaS) product, and met any requisite thresholds to receive a tax form, then you'll have the relevant forms delivered to you.
We encourage you to reach out to any platforms you've transacted on to ask whether or not they support the provision of these tax forms.
Disclaimer: This article is intended to provide basic, helpful information surrounding crypto taxes, and does not serve as formal legal or tax advice. Zero Hash and its affiliates do not provide legal, financial, or tax advice. Please consult a professional financial advisor if you have additional questions surrounding how to properly record and report your crypto activity. Zero Hash’s Tax as a Service Product is only available to end users if the platform through which the end user is using the Zero Hash crypto services enables the tax services.