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Your Crypto Tax Answers

Learn about crypto taxes in the US, Australia, and Germany with insights from professional crypto tax accountants while discovering the best crypto tools in the market.

Are the new crypto tax rules in the US delayed for investors?

Reports surfaced recently with a statement from the Internal Revenue Service (IRS) claiming that the enforcement of new crypto reporting rules under the Infrastructure Investment and Jobs Act 2021 would be delayed.

The new rule requires crypto “brokers” like exchanges to report more customer information, such as trades and income transactions of over $600, among other reporting requirements.

Even if crypto service providers don’t need to start complying with the new reporting requirements yet, do crypto investors need to do any extra crypto reporting this year? Let’s find out!

In this article:

How does the Infrastructure Bill affect crypto?

The infrastructure bill had two main effects on crypto providers and investors:

(1) The 1099-B reporting requirement for crypto brokers.

(2) The expansion of US tax code section 60501 to include digital assets.

What rules were delayed by the IRS?

According to an IRS statement, due to a lack of clarification on which companies could classify as a “crypto broker,” additional crypto tax reporting rules were delayed until after 2023, with this year functioning as a transition period.

The extra reporting rules included:

  • Crypto brokers would have to fill out a 1099-B Form including details of trades (e.g., profits and losses) for every customer;

  • Crypto providers would also have to issue that information to the IRS.

Amid public discussions over the new crypto regulations, the Treasury Department is yet to publish the final rules, with the current reporting expectations being delayed.

The statement includes the sections regarding crypto from the Infrastructure Investment and Jobs Act of 2021:

“Brokers will not be required to report or furnish additional information with respect to dispositions of digital assets under section 6045, or issue additional statements under section 6045A, or file any returns with the IRS on transfers of digital assets under section 6045A(d) until those new final regulations under sections 6045 and 6045A are issued.”

Why is this important for crypto investors?

Even though the new Form 1099-B filing requirement is targeting crypto brokers, this will also impact crypto investors.

First, the need for changes to issue these forms with every trade information for millions of customers will cause an enormous reporting burden and likely lead to mistakes.

However, the responsibility of making sure that information in these forms is correct lies on crypto investors, leading investors to search for help from professional accountants.

Meanwhile, the inclusion of digital assets as “cash” under the proposed modification of Section 60501 requires anybody who receives more than $10,000 of cash (including digital assets) in one or multiple transactions to file a Form 8300 return with the IRS. This requirement, if enacted, could impose burdensome requirements on companies that accept cryptocurrency as a form of payment.

Do crypto investors have extra reporting needs right now?

The IRS Announcement 2023-2, delaying the implementation of crypto reporting requirements under the Infrastructure Bill, is putting a hold on any new reporting requirements for crypto investors.

The best crypto tax software: CoinTracking

The best crypto tax software in the market is CoinTracking.

You can import your trades using CSV or API, track your gains/losses, and generate tax reports according to your preferred accounting method.

CoinTracking is your full crypto tax solution for:

Moreover, CoinTracking can easily classify all your earnings from yield farming, liquidity pools, crypto staking, and much more.

Crypto taxes with no errors: CoinTracking Full Service in the US

CoinTracking also offers a Full Service for US traders. A crypto reconciliation tax expert from Polygon Advisory Group, a leading US crypto tax firm, will review your CoinTracking account, help fix any errors, and ensure you submit your crypto tax reports error-free.

Do you have any crypto tax questions? Check the best guides:

  1. How are rebase token protocols taxed?

  2. Do you pay taxes on fan tokens?

  3. Do you pay taxes when trading stablecoins?

  4. How is Yield Farming Taxed?

  5. DeFi Taxes: The Complete Guide.

  6. How to save taxes with a Bitcoin IRA.

  7. Do you pay taxes for receiving Bitcoin tips?

  8. Uniswap Taxes Guide

  9. Is wrapping crypto taxable?

  10. How to calculate taxes with Bitcoin dollar-cost averaging?

  11. Do you pay tax on stolen, hacked, or lost crypto?

  12. FIFO for crypto taxes? Implications of accounting methods.

  13. NFT Taxes: The Complete Guide.

  14. Is Bitcoin taxable? The ultimate guide for 2021 taxes.

This post is part of the Crypto Taxes AMA series. Follow our weekly AMAs on Twitter where our expert CPA, Sharon Yip answers your crypto tax questions. You can download 35+ AMA crypto tax reports for free.

Disclaimer: All the information provided above is for informational purposes only and should not be considered as professional investment, legal, or tax advice. You should conduct your own research or consult with a professional financial advisor when investing.

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