How to Report Crypto on Taxes

Millions of Americans now hold crypto, but IRS rules trip up even experienced investors. Not sure how to report crypto on taxes without risking costly mistakes or missing out on possible deductions? You’re not alone—cryptocurrency tax reporting can feel confusing, especially with new assets like NFTs and DeFi protocols.

This article explains how to report crypto on taxes for the 2024 season, starting with IRS definitions and taxable events, continuing through forms, calculations, and top tools. You’ll learn: which crypto activities are taxable, how to fill out IRS forms (with examples), mobile-friendly reporting, and how OKX’s built-in tools make compliance much easier. Whether you’re an investor, trader, NFT collector, or DeFi user, this complete guide will walk you through tax rules and best practices to get crypto taxes done right.

What Is a Digital Asset (According to the IRS)?

Digital assets, according to the IRS, are broadly defined as any digital representation of value recorded on a cryptographically secured distributed ledger. Cryptocurrencies like Bitcoin and Ethereum, NFTs (non-fungible tokens), and certain stablecoins all count. The IRS sees these assets as “property,” meaning transactions—buying, selling, trading, or earning—may have tax implications.

This tax treatment exists because digital assets, or virtual currency, can generate profits or income, just like stocks or other investments. Whenever you dispose of or earn crypto, you might owe taxes depending on your U.S. dollar gains, losses, or the value at receipt.

💡 Pro Tip: Keep clear records—OKX makes this easier by providing detailed transaction histories to help support your digital asset reporting if the IRS asks for proof.

IRS Digital Asset Criteria

The IRS clarified in 2024 that digital assets include:

• Cryptocurrencies (Bitcoin, Ethereum, Solana, etc.)
• Stablecoins (USDT, USDC)
• Non-fungible tokens (NFTs)
• Certain wrapped or derivative tokens

Other virtual currencies or tokens may also be included if they satisfy the IRS definition. Always consult the latest IRS Notice 2024-24 for updates.

Which Crypto Activities Are Taxable?

Not all crypto moves generate taxes, but many do. Taxable crypto events are actions that trigger a taxable gain, loss, or new income.

Key taxable events include selling any crypto for dollars, swapping one crypto for another, spending crypto on goods/services, or earning new coins through rewards or work. Simply buying and holding crypto is not a taxable event in itself.

OKX makes it easy to sort your transactions for tax season by letting you export all history, helping you quickly see which events may be taxable versus tax-free.

Common Taxable Scenarios

• Selling crypto for fiat (e.g. USD)
• Swapping/trading one crypto for another
• Spending crypto to buy goods or services
• Receiving crypto from mining, staking, or airdrops
• Earning rewards, bonuses, or interest in crypto

When is Crypto Tax-Free?

Certain actions are not taxable:

• Buying crypto with fiat and simply holding
• Transfer of crypto between your own wallets (no sale/trade involved)
• Moving assets from OKX to another personal account

💡 Pro Tip: Track every action. Good records help separate what’s taxable and what’s not—OKX’s exports are a big help here!

Overview: How to Report Crypto on Taxes (5 Steps)

Wondering exactly how to report crypto on taxes? Here’s a clear 5-step process for 2024:

1. Export your wallet/exchange transaction history (on OKX, easily download a CSV from your account dashboard)
2. Classify every transaction (buy, sell, earn, trade, transfer)
3. Calculate your gains and losses (using fair market value and cost basis for each event)
4. Report on IRS forms:
   • Form 8949 for individual trades
   • Schedule D for totals
   • Schedule 1 or C for income
   • Main 1040 tax return
5. Keep supporting documentation—download all statements, receipts, and trade records

OKX gives users a streamlined export/report workflow—making Step 1 the easiest part!

Visual Flowchart: Crypto Tax Reporting at a Glance

• Download transaction history
• Classify transactions
• Calculate profit/loss
• Enter figures into IRS forms
• Save records for at least 3 years

IRS Forms for Crypto Reporting: 1040, 8949, Schedule D, and More

Filing your crypto on taxes usually involves several IRS forms. Every U.S. taxpayer now encounters a digital asset (crypto) question at the top of Form 1040. Additional forms depend on your specific activities:

• Form 1040: Yes/No crypto asset question
• Form 8949: List capital gains/losses from each sale or trade
• Schedule D: Summarize totals from Form 8949
• Schedule 1: Report earned crypto income (staking/airdrops, non-business)
• Schedule C: For business/mining income from crypto

You can easily download your full OKX tax report and map its entries to these IRS forms.

How to Answer the Crypto Question on Form 1040

Every taxpayer must answer: “At any time during 2023, did you receive, sell, exchange, or otherwise dispose of a digital asset?”

• Yes: If you sold, traded, earned, or spent crypto
• No: If you only bought and held, or transferred between your own wallets

Check the box accordingly. Leaving it blank or answering incorrectly may raise red flags during an audit.

Filling Out Form 8949 and Schedule D

To report each taxable crypto trade or sale:

• List every trade on Form 8949
  • Date acquired/sold
  • Proceeds (USD at sale)
  • Cost basis (USD at purchase)
  • Gain/loss for each

Example entry:

Total all lines, copy results to Schedule D, and then to Form 1040. OKX’s downloadable trade history can be uploaded to most tax software platforms for this step.

Reporting Crypto Gains and Losses

Every time you sell, spend, or trade crypto, you typically realize a capital gain or loss. These are driven by the difference between what you paid (your cost basis) and what you received (the sale or trade value).

Crypto gains are taxed based on how long you held the asset:

• Short-term (held 1 year or less): taxed as ordinary income
• Long-term (held over 1 year): taxed at lower capital gains rates

Track each asset’s acquisition and sale date to determine which applies. OKX’s history reports provide cost basis and holding period data.

Short-Term vs. Long-Term: What It Means for Taxes

• Short-term (≤ 12 months): Taxed at your income tax bracket (10–37%)
• Long-term (> 12 months): Taxed at 0%, 15%, or 20%
• Holding period starts day after acquisition
• Different rates apply to each lot

Calculating Your Crypto Profit and Loss

Formula:

Capital Gain/Loss = Fair Market Value at Sale - Cost Basis at Purchase

Example Table:

💡 Pro Tip: Download OKX’s trade CSVs for automated cost basis and gain/loss calculations.

Reporting Crypto Earned Income: Staking, Mining, Airdrops, Interest

Earning crypto from staking, mining, airdrops, or referral programs is treated as ordinary income at the fair market value on the date received. This differs from trading/selling (which falls under capital gains). The way you report depends on whether it’s a hobby or business activity.

OKX makes it easy to export your staking and rewards history, providing records sorted by date and amount—critical for correct income reporting.

• Staking rewards: Value counts as income upon receipt
• Mining income: Report as business income if running as a business; as hobby income if casual
• Airdrops and bonuses: Report at market value when received

Which Form to Use: Schedule 1 vs Schedule C

• Schedule 1: Report crypto earned occasionally—not as part of a business (e.g., staking or airdrops for personal use)
• Schedule C: Use for regular mining, operating a crypto business, or significant self-employment

The difference affects deductions and tax rates. If in doubt, consult a tax pro.

NFTs, DeFi, and Advanced Tokens: How to Report

NFTs (non-fungible tokens) and DeFi (decentralized finance) activities have specific tax implications.

NFTs: Selling or trading NFTs creates a taxable event. Profit equals the sale price minus your purchase cost. If you create and sell NFTs, income may be treated as self-employment.

DeFi: Common DeFi actions—like swaps, providing liquidity, or borrowing/lending—may trigger taxable gains, income, or interest. For example:

• Swapping tokens: Each swap is a trade and must be reported
• Liquidity pools: Depositing may result in a taxable event; withdrawals often do too
• Lending/borrowing: Interest earned is ordinary income

OKX will add support for NFT and DeFi transaction exports as these features roll out, smoothing the reporting process for newer assets.

Crypto Tax Scenarios: Trader vs. Investor vs. Casual User

Are you a crypto investor, active day trader, or occasional user? The IRS treats these profiles differently when it comes to documentation and deductions.

• Investor: Typically buys, holds, and occasionally trades. Reports gains/losses on Form 8949/Schedule D.
• Trader: High volume, frequent trading. May qualify for trader tax status (rare), which allows some extra deductions.
• Casual user: Buys and holds, sometimes earns crypto or stakes. Usually only a few taxable events.

OKX is built for everyone—allowing both pro traders and casual investors to export tax reports and transaction summaries for any reporting need, including multi-exchange/portfolio users.

Record-Keeping and Documentation for Crypto Taxes

Crypto tax compliance demands thorough records. The IRS expects you to track:

• All transactions (dates, type, amount, USD value)
• Receipts for purchases and transfers
• Wallet addresses and ledger details

Keep all records for at least 3 years—and preferably up to 7. Use crypto tax trackers or spreadsheets to help. OKX provides downloadable statements and complete trade/export histories for both web and mobile access.

Best Crypto Tax Software and Tools (2024)

Top tax software lets you DIY your crypto tax reporting or integrate with exchanges for automatic imports. Popular choices for 2024:

• CoinTracker
• Koinly
• TokenTax
• CryptoTaxCalculator
• ZenLedger
• Free: IRS-provided forms and Excel templates

OKX supports direct integrations with leading tax software, letting users import transactions via CSV or API for fast and accurate filings. Automate your reporting by connecting OKX straight to your platform of choice.

International Crypto Tax Filing: What Non-US Users Need to Know

Crypto taxes aren’t just a U.S. concern—other countries have their own digital asset rules:

• EU: Treats crypto as property or currency (country-dependent)
• UK: Capital gains tax on disposals, income tax on earnings
• Australia: Capital gains/income tax; specific bright-line rules

Always check with local tax agencies and keep documentation. OKX offers global compliance support and resource links for key jurisdictions.

Mobile and On-the-Go: Filing Crypto Taxes from Your Phone

Busy trader or mobile-first investor? It’s now easier than ever to prep your crypto taxes right from your phone.

• Use mobile-friendly tax apps to snap photos of receipts or receipts
• Export your OKX transaction history straight from the app, ready for software import

Stay organized and act fast—don’t wait until the last week of tax season.

Recent IRS Updates & Crypto Regulation Changes for 2024

Crypto tax rules change fast. For 2024, key IRS updates include enhanced Form 1040 digital asset question language and clarification that more token types (like NFTs or wrapped assets) are covered.

Check the latest IRS digital assets guidelines or subscribe to OKX compliance bulletins for updates.

Frequently Asked Questions

How to report crypto on taxes?

To report crypto on taxes, download your full transaction history from exchanges or wallets (like OKX), classify each event (buy, sell, earn), calculate gains or income, and enter results on IRS forms—typically Form 8949, Schedule D, and main 1040. Keep all documentation for three years or more in case of an audit.

How to report crypto losses on taxes?

Report crypto losses on Form 8949 and Schedule D by listing each losing transaction. You can deduct total capital losses against gains, and if losses exceed gains, you can offset up to $3,000 of other income per year. Excess losses carry forward for use in future years.

How much crypto do you have to report on taxes?

You must report all taxable crypto transactions, no matter how small. The IRS does not currently set a minimum reporting threshold—every gain, loss, or income event should be reported. Some forms (e.g., 1099-K/1099-B) use transaction limits, but you are still required to self-report.

How to report crypto staking rewards on taxes?

Classify staking rewards as ordinary income—report them on Schedule 1 (if a hobby/occasionally) or Schedule C (as a business). Use the fair market value of rewards received on the date you gain control. Most tax software and OKX rewards exports provide the necessary details.

How to report crypto on taxes TurboTax?

In TurboTax, you can import your OKX or other exchange transaction CSVs, or use API integrations available in TurboTax Premier or above. Then, select the appropriate IRS forms (8949/Schedule D) within the guided steps to report crypto activity accurately.

Can you offset crypto losses against other gains?

Yes—crypto capital losses can offset other capital gains (crypto or other investments) and up to $3,000 of regular income per year. Any leftover capital losses carry forward to offset gains in future tax years. Always track and report these accurately to maximize deductions.

Conclusion

Reporting crypto taxes doesn’t have to be overwhelming. Remember these key takeaways:

• Start by learning how to report crypto on taxes and identify all taxable events before filing
• Use OKX’s transaction exports and reporting tools for accurate records and faster processing
• File the right IRS forms based on your activity (trading vs. earned income vs. NFTs)
• Stay updated on IRS rules and keep thorough documentation for every year

Leverage OKX’s reporting features and integrations to simplify your crypto tax journey. Always consult a tax professional for personalized advice, and stay secure with best practices. Happy (and accurate) filing!

Risk Disclaimer: Crypto trading and tax reporting involves risks, including regulatory changes and possible audits. Always follow IRS rules and security best practices, such as enabling 2FA and storing backup records. Consult a qualified tax advisor for personalized guidance.