Did you receive Form 1099-MISC from a cryptocurrency exchange?
In this guide, we’ll explain everything you need to know if you did (or didn’t) receive Form 1099-MISC from one of your cryptocurrency exchanges. We’ll break down the basics of cryptocurrency taxation, explain what Form 1099-MISC is, and walk through how you can use the information contained inside it to submit your tax return.
How is cryptocurrency taxed?
Cryptocurrency is considered property by the IRS and is subject to capital gains and ordinary income tax.
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Remember, Form 1099-MISC does not contain information about capital gains. The form is designed to track ordinary income only.
For more information on how cryptocurrency is taxed, check out our complete guide to cryptocurrency taxes.
What is Form 1099-MISC and why did I receive one?
Form 1099-MISC is designed to track miscellaneous income, such as income from staking, referral rewards, and airdrops.
Some cryptocurrency exchanges issue Form 1099-MISC when customers earn at least $600 of cryptocurrency income through the platform during the tax year. You should receive the form by January 31 of the following year.
Cryptocurrency income is generally reported as ‘Other income’ on Form 1099-MISC.
What is the difference between 1099 and 1099-MISC?
1099 forms are designed to help businesses report taxable events to customers and the IRS. Because there haven’t historically been clear guidelines on which 1099 forms exchanges are required to send to customers, different exchanges take different approaches to tax reporting.
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1099-MISC is a specific type of 1099 form designed to report miscellaneous income. Some exchanges issue Form 1099-B, designed to report disposals of property, or Form 1099-K, designed to report gross transaction volume.
While each of these 1099s have nuanced differences, they all serve the same purpose: reporting non-employment-related income to the IRS.
Which exchanges send 1099-MISC?
Here are a few of the exchanges that send Form 1099-MISC to their customers.
- Binance.US
- BlockFi
- Celsius
- Coinbase
- Coinbase Pro
- eToro
- Gemini
- Kraken
- Voyager
What should I do with Form 1099-MISC?
There’s no need to attach Form 1099-MISC to your tax return. However, you can use the information on the form to help you report your cryptocurrency income.
What should I do if I didn’t receive a 1099-MISC from my exchange?
As stated earlier, exchanges will only send the form if you’ve earned at least $600 of income. Some exchanges do not issue Form 1099-MISC at all.
All of your cryptocurrency income should be reported on your tax return regardless of whether or not you receive Form 1099-MISC. Remember, the IRS tracks cryptocurrency transactions by analyzing public blockchains like Bitcoin and Ethereum.
Crypto tax software like CoinLedger can help you easily determine your capital gains and ordinary income taxes for the year. Just connect your exchanges and wallets and let the platform take care of the rest.
Is the information on my Form 1099-MISC accurate?
While Form 1099-B can often contain cost basis errors related to transferring crypto into or out of exchanges, Form 1099-MISC is typically more accurate. Most exchanges have the capability to calculate your earned income at the time of receipt.
How much tax do I pay on 1099-MISC income?
Any income that’s reported on Form 1099-MISC will be considered ordinary income and taxed accordingly. At this time, income tax within the U.S. ranges from 10-37% depending on your personal income bracket.
What happens if I don’t report my cryptocurrency income on my tax return?
Not reporting cryptocurrency income is considered tax evasion, which is punishable by a maximum of 5 years in prison and a fine of $100,000. In cases where a fraudulent return is filed, there’s no limit how far back the IRS can go in a cryptocurrency tax audit.
If you don’t report income that’s been reported on Form 1099-MISC, it’s likely that your tax return will be flagged automatically and you will receive a warning letter from the IRS about your unpaid tax liability.
How do I report cryptocurrency income on my taxes?
Reporting cryptocurrency income on your tax return can differ depending on whether you are reporting as a business or an individual.
If you are reporting crypto income as an individual, you’ll likely report it on Schedule 1.
If you are reporting crypto income as a business, you’ll likely report it on Schedule C.
For more information, check out our guide to reporting crypto on your tax return.
Simplify your crypto tax reporting
Trying to report your crypto taxes on your own can be difficult. CoinLedger can help.
With automatic integrations to Coinbase, Kraken, Gemini, and the Ethereum blockchain, CoinLedger can take the stress out of crypto tax reporting. Once you’ve connected your wallets, you can generate a comprehensive tax report which can be uploaded to platforms like TurboTax and TaxAct.
More than 400,000 investors use CoinLedger to file their crypto taxes in minutes.
Frequently asked questions
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