Wondering how to report taxes on your MetaMask transactions?
Since MetaMask users interact with multiple decentralized applications, reporting taxes can become a struggle.
In this guide, we’ll break down everything you need to know about MetaMask tax reporting. We’ll also share a simple 4-step process to help you add all of your MetaMask transactions to your tax return in minutes.
Cryptocurrency is treated as property by the IRS and is subject to capital gains and ordinary income tax.
Capital gains tax: If you dispose of cryptocurrency, you’ll recognize a capital gain or loss depending on how the price of your crypto has fluctuated since you originally received it. Examples include selling crypto for fiat or trading cryptocurrency for other cryptocurrencies.
Ordinary income tax: If you’ve earned cryptocurrency, you’ll recognize ordinary income and pay income tax. Examples of earning crypto income include receiving airdrops and earning staking rewards.
For more information, check out our complete guide to crypto taxes.
If you’ve used MetaMask during the tax year, it’s likely that you’ve paid gas fees. These gas fees come with their own tax benefits.
Typically, your capital gains and losses are calculated based on the following formula.
Gas fees that are directly related to buying assets can increase your cost basis. Meanwhile, gas fees that are related to selling assets can reduce your gross proceeds. In either case, this would reduce your capital gain in a disposal event and thus lower your overall tax liability.
For more information, check out our guide to gas fee taxes.
At this time, MetaMask does not report 1099 reporting information to the IRS.
This may change in the near future. In late 2021, President Biden signed a bill that required any broker that facilitates a cryptocurrency transaction to report 1099 reporting information. It’s possible that MetaMask will be required to provide tax reporting information to users and the IRS when the bill’s crypto provisions take effect.
In addition, it’s important to note that all transactions on the Ethereum blockchain are publicly available. In the past, the IRS has teamed up with contractors like Chainalysis to match anonymous wallet addresses to known taxpayers.
Wondering how you can download your MetaMask transactions? Here’s a simple step-by-step process.
1. Go to your MetaMask wallet.
2. Click the three dots on the top-right corner, then click ‘View Account on Etherscan’.
3. Below your transactions, you’ll find an option to download a csv import of your MetaMask transactions.
4. When you click this option, you’ll be asked to specify a date range for your transactions.
5. Once you complete the reCAPTCHA, you can download a csv file containing all of your relevant transactions for the specified time period.
It’s important to remember that these steps will only help you generate a record of your MetaMask transaction history. It’s likely that this information by itself won’t be enough to accurately file your tax return.
Unfortunately, it’s difficult for MetaMask — or any other wallet provider — to give users a comprehensive crypto tax report.
To accurately calculate your capital gains, MetaMask would need a complete record of your crypto buying and selling transactions. However, most investors use multiple wallets and exchanges. Meanwhile, MetaMask only has access to the transactions that users conducted with their MetaMask wallets.
Luckily, there is a solution to this problem. Crypto investors use crypto tax software like CoinLedger to aggregate their complete cryptocurrency transaction history and generate a comprehensive tax report.
Here’s how you can import your MetaMask transactions into your CoinLedger account in minutes.
1. Select your MetaMask browser extension.
2. Click the icon under your account name to copy your wallet address.
3. Within your CoinLedger account, select Ethereum from the list of supported sources
4. Paste your wallet address into the wallet address form.
And that’s it! Your transactions from your MetaMask wallet will be pulled into your CoinLedger account automatically. Once you sync your other transactions from other wallets and exchanges, you’ll be able to generate a complete tax report with the click of a button.
Want to get started reporting your MetaMask transactions? CoinLedger can help.
With CoinLedger, reporting taxes on cryptocurrency has never been easier — whether you’re interacting with NFT marketplaces, DeFi protocols, or centralized exchanges. More than 300,000+ investors trust CoinLedger to simplify the process of filing their crypto taxes.