![How to Fill Out Form 8949 for Cryptocurrency](https://coinledger.io/cdn-cgi/image/format=auto/https://cdn.prod.website-files.com/614c99cf4f23700c8aa3752a/622a805aba4f4c7a96eaadb1_Form-8949-Featured-Image-V1-04.jpg)
Key Takeaways
- All of your cryptocurrency disposals should be reported on Form 8949.
- To complete your Form 8949, youâll need a complete record of your cryptocurrency transactions â including your gains and losses.Â
- A crypto tax software like CoinLedger can auto-generate a completed Form 8949!
If you disposed of cryptocurrency during the year, youâre required to report your gains and losses on Form 8949.Â
Unfortunately, filling out the form can take serious time and effort â especially if youâve used multiple wallets and exchanges during the tax year.
In this guide, weâll share everything you need to know about Form 8949 before you get started filing your taxes. Weâll also break down step-by-step instructions on how to report your cryptocurrency disposals on your tax return.Â
What tax form should I use to report cryptocurrency and NFTs?Â
In the United States, crypto is taxed as income and capital gains. How your crypto is taxed and reported depends on the nature of your income.Â
Form 8949 for crypto disposals: If you dispose of crypto-assets â such as selling them, trading them away, or using them to make a purchase â you should report your disposal on Form 8949.Â
Schedule 1 for crypto income: If youâre an individual taxpayer who earned crypto-assets as income or rewards â such as staking and mining rewards â you should report your earnings as income, typically on Schedule 1.Â
For more information, check out our complete guide to reporting crypto on your taxes.Â
Who has to fill out Form 8949 for cryptocurrency?Â
You should report your cryptocurrency on Form 8949 in the following situations:Â
- I made a profit while selling/trading cryptocurrency/NFTs Â
- I made a loss while selling/trading cryptocurrency/NFTsÂ
- I used cryptocurrency to make a purchase
One exception to these rules is if youâre buying and selling cryptocurrency in a self-directed crypto IRA. These accounts are tax-advantaged and as a result, these trades should not be reported on Form 8949.Â
How to fill out Form 8949 in 6 steps
Hereâs a 6-step process on how to report your cryptocurrency and NFT disposals on Form 8949.Â
Step 1. Take into account all of your disposal eventsÂ
The first step to filling out your Form 8949 is to take account of every one of your cryptocurrency and NFT disposals during the tax year.Â
Remember, each one of your disposals across your wallets and exchanges need to be reported on Form 8949. Examples of disposals include selling your cryptocurrency or NFTs, trading your crypto assets away, or using cryptocurrency to purchase goods or services.Â
Step 2. Collect information on your cryptocurrency disposalsÂ
To report your cryptocurrency and NFT disposals on Form 8949, youâll need the following information:Â
- A description of the property you sold (ex. 1.5 BTC)Â
- The date you originally acquired the propertyÂ
- The date you sold or disposed of the propertyÂ
- Proceeds from your crypto disposal
- Your cost basis for purchasing the propertyÂ
- Your gain or lossÂ
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If you havenât kept accurate records of your proceeds and cost basis for your crypto transactions, you may have trouble filling out Form 8949. If this is the case, you may want to consider using crypto tax software to generate a comprehensive tax report automatically.
Step 3. Divide your transactions into short-term and long-term disposalsÂ
Form 8949 is divided into two sections: short-term and long-term. You should take note of which of your disposals fall into which category.Â
If you dispose of your assets after holding them for less than 12 months, they should be reported on the short-term section. If you dispose of your assets after holding them for more than 12 months, they should be reported on the long-term section.Â
Long-term disposals are subject to more favorable tax rates.Â
![Long term capital gains](https://coinledger.io/cdn-cgi/image/format=auto/https://cdn.prod.website-files.com/614c99cf4f23700c8aa3752a/622a806fa4ae0fec22b4940c_622a72c84582b56b1c0ed196_Avoid%2520Bitcoin%2520Taxes%2520Infographic%25202_V3%2520(1).jpeg)
If your total income is more than $200,000 during the year, you may have to pay net investment income tax (NIT). This is an additional 3.8% tax on capital gains, interest income, and other forms of âinvestment incomeâ.
Step 4. Select the correct optionÂ
In both the short-term and long-term sections, youâll need to select one of three checkboxes. Here are the options in Part I.Â
(a) Short-term transactions reported on Form(s) 1099-B showing basis was reported to the IRS
(b) Short-term transactions reported on Form(s) 1099-B showing basis wasnât reported to the IRS
(c) Short-term transactions not reported to you on Form 1099-B
Itâs most likely that youâll select box C. At this time, most cryptocurrency exchanges do not send Form 1099-B to customers. However, if youâve received Form 1099-B from an exchange, youâll need to select box A or box B.Â
Step 5. Report your disposals on Form 8949Â
Now, you can get started recording your cryptocurrency disposals on Form 8949.Â
To better understand how to fill out the form, letâs take a look at a sample transaction history.Â
![Cryptocurrency capital gains tax example](https://coinledger.io/cdn-cgi/image/format=auto/https://cdn.prod.website-files.com/614c99cf4f23700c8aa3752a/622a806f4582b54f210f768d_622a72f294f0b205e3b1c1e5_Form%25208949%2520Image%25201%2520V1%2520(1)%2520(1).jpeg)
Hereâs how Benâs transactions would be reported on Form 8949.Â
![Cryptocurrency Form 8949 filled out example](https://coinledger.io/cdn-cgi/image/format=auto/https://cdn.prod.website-files.com/614c99cf4f23700c8aa3752a/622a806f2c86c7188cb833e6_622a731b23e8efa43b21642d_Form-8949-Infographic-2_V2%2520(1).jpeg)
Pro Tip: If you disposed of âcollectibleâ NFTs during the tax year, you may want to report your short-term and long-term gains and losses from these assets on a separate Form 8949. Collectible NFTs are subject to a different tax rate. For more information, check out our guide to NFT taxes.
Step 6. Report your net gain or loss on Schedule DÂ
Once youâve finished reporting your disposals on Form 8949, you are required to report your net short-term and long-term capital gains/losses on Schedule D.Â
![Schedule D](https://coinledger.io/cdn-cgi/image/format=auto/https://cdn.prod.website-files.com/614c99cf4f23700c8aa3752a/622a806fc92ec33abad09e95_622a70469ad727749b224e80_15gSfxVEyPJxwT4Aop1Ce-o_qbqq_SRSTIMjwOa6r0qVKQ3eyDXNzXgAvTcUvaKkO2Z2AfZ7kQFy_Eenz76tzXv-jTBQ2EbZpWhCBPVRK8Onpskw_e_4vrhxW5N_Z5vmZG3ajl3T.png)
If you have any capital losses from prior years that you wish to carry forward, you can report them here.Â
How to generate a Form 8949 with crypto tax softwareÂ
Looking for an easier way to fill out Form 8949? Crypto tax software like CoinLedger can help.
With CoinLedger, you can connect to your wallets and exchanges and import your transactions in minutes! Once youâre done, you can download completed IRS forms like Form 8949!
Get started with a free CoinLedger account today.Â
Do I need to fill out Form 8949 if I received a 1099 form?Â
If youâve traded cryptocurrency in the past year, you may receive Form 1099 from one or more cryptocurrency exchanges. If this is the case, you are required to fill out Form 8949.Â
Remember, if youâve transferred cryptocurrency into or out of an exchange, your Form 1099 may have incomplete or incorrect information about your cost basis and/or proceeds. Itâs wise to double-check these forms and not completely rely on their accuracy for your tax reporting.Â
Do I have to fill out Form 8949 if I didnât receive a 1099 form?Â
If you didnât receive a 1099 form, you are still required to fill out Form 8949 if you have disposed of crypto during the tax year.Â
Remember, all of your taxable income from cryptocurrency should be reported on your tax return. Failure to do so is considered tax evasion â a serious crime with serious consequences.Â
How can I add my cryptocurrency Form 8949 to TurboTax?Â
If youâre using TurboTax or TaxAct to file your tax return, CoinLedger can help you generate a cryptocurrency capital gains report that can be imported into either platform.
For more information, read our guides to TurboTax and TaxAct imports.Â
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What should I do if I have too many transactions on Form 8949?Â
In some cases, platforms like TurboTax limit the number of transactions you can report on Form 8949.Â
Remember, you are required to report all of your taxable disposals to the IRS. Taxpayers have the option to report consolidated total amounts on Form 8949 and provide an attached report with all the required details.Â
CoinLedger can help you generate a consolidated capital gains report you can import into your tax platform of choice. You can then mail in a detailed record of your cryptocurrency disposals to the IRS.Â
For more information, read our guide on how to mail in Form 8949.Â
Get started with CoinLedgerÂ
Want to generate comprehensive capital gains and income tax reports in minutes? CoinLedger can help.Â
More than 500,000 investors around the world use CoinLedger to simplify the tax reporting process. With integrations to the worldâs biggest exchanges, the platform can save you hours of effort during tax season.
Frequently asked questions
- Is cryptocurrency reported to the IRS?
Yes. Cryptocurrency is considered property by the IRS and can be subject to capital gains and ordinary income tax.
- How do I report cryptocurrency on Form 8949?
All cryptocurrency disposals need to be reported on Form 8949. You are required to include cost basis, gross proceeds, and the date of receipt and disposal for each crypto-asset.
- Is crypto reported on Schedule D?
Your net capital gain or loss from all sources (including cryptocurrency) should be included on Schedule D.
- How much tax do I pay on Form 8949 transactions?
The tax rate you pay on cryptocurrency disposals varies depending on several factors, including your income bracket and how long you held your crypto.
- Can I get a Form 8949 from Coinbase?
While Coinbase One subscribers can get a pre-filled Form 8949, this form only includes transactions from Coinbase â not your other crypto wallets and exchanges.
- Do I have to report every transaction on Form 8949?
All of your disposals of cryptocurrency and other capital assets should be reported on Form 8949. You can fill out a consolidated version of 8949 and send a full version of all your transactions separately.
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