New Crypto Tax Regulations: How They Impact Your Investments in 2025
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Dawn Allcot
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Renee Ross
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Crypto exchange will soon be required to report trading activity for its users to the IRS. Stemming from the bi-partisan Infrastructure Investment and Jobs Act (IIJA) — the IRS and the U.S. Treasury released the final regulations on crypto reporting requirements for brokers of digital assets.
Check Out: What To Do If You Owe Back Taxes to the IRS
The reporting rules were finalized in June 2024 — but do not go into effect until the 2026 tax filing season. If you buy or sell crypto through a centralized exchange — you may end up receiving a 1099 form — as well as a statement showing the cost basis of your digital assets.
Here’s everything you need to know:
Overview of the New Crypto Tax Regulations:
Under the new regulations, crypto trading platforms will be mandated to issue the new IRS Form 1099-DA to investors and the IRS showing “gross proceeds on the sale of digital assets beginning in 2026 for all sales in 2025.” Brokers will be required to also report information on the tax basis for certain digital assets beginning in 2027 for sales in 2026.
Brokers who manage stock and mutual fund portfolios are already mandated to share this information with clients and the IRS. Payment platforms like Venmo and PayPal also issue 1099-K forms when users receive payments for goods and services. PayPal is one of the platforms already issuing crypto gains and loss statements to make it easier for traders to track their crypto income.
Beginning in 2027, under the new legislation, crypto platforms will also need to report the cost basis for assets purchased as far back as 2023. The cost basis is the price paid for a digital asset minus any transaction costs.
How These Changes Affect Crypto Investors
If you are already reporting your income, profit and losses from cryptocurrency, the new IRS regulations, if approved, won’t affect your tax returns or investments. In fact, it might make it easier to track your profit, loss and cost basis for your crypto investments.
However, the potential for errors exists. You’ll need to keep your own records instead of relying solely on the 1099 forms issued by your crypto platform. If you notice a discrepancy, you’ll need to report it immediately to your crypto broker and request an updated, accurate form.
Take care to ensure you report your crypto earnings as reflected on any 1099 forms; otherwise, it could result in an IRS audit. At best, you’ll receive a CP2000 notice, also known as an underreporter inquiry. You may owe additional taxes and possible penalties. You will need to reply to the notice within 30 days, either agreeing to the additional income reported or sending documentation that shows it is incorrect.
If you find the information is correct, you should pay the additional taxes by the due date on the notice to stop interest and penalties from accruing.
Reporting Requirements and Deadlines
The IRS requires reporting all of your crypto sales on Schedule-B, just as you would for the sale of other investments. You must report all gains and losses, regardless of whether the transaction occurred on an exchange, an app, or in your digital wallet. This information must be included in your tax return and submitted by the due date (currently April 15, 2025).
Starting in 2025, the IRS now requires centralized crypto exchanges to report crypto sales for the year –providing both users and the IRS with a Form 1099-DA in a timely manner the following year. And starting in 2026, the IRS requires crypto exchanges to report cost basis information for all crypto purchased through the exchange (going back to transactions starting January 1, 2023).
There are no current deadlines on when these forms will be required by — though if it ends up similar to investment reporting on the 1099-B — the form will be due no later than February 15 the following year.
How Does the IRS Define Digital Assets?
As we explore the changing world of crypto tax, you might wonder what constitutes a digital asset. The IRS defines digital assets as “a digital representation of value recorded on a cryptographically secured distributed ledger or similar technology.”
In plain language, this includes cryptocurrency, stablecoins and NFTs. Digital assets can be traded, used to pay for goods or services, and converted into other assets, such as other digital assets or fiat money.
How Is Crypto Taxed?
In January 2024, the IRS and U.S. Treasury Department issued a notice stating that businesses do not have to report the receipt of digital assets exceeding $10,000 within 15 days of receipt. In other words, crypto payments and other digital payments are no longer treated as cash in the eyes of the IRS.
However, taxpayers should still report the receipt of digital assets as income on their tax returns, factoring in the cost basis and any losses. Keep in mind that digital assets received as payment for goods or services are taxed at your normal income tax rate, based on federal income tax brackets. Income tax rates range from 10% up to 37%, depending on your adjusted gross income.
If you buy crypto or NFTs, you don’t pay taxes on the purchase until you sell it.
If you sell crypto or NFTs at a profit, however, your crypto taxes are the same as capital gains tax rates. Short-term capital gains tax equals your marginal tax rate based on your income level. In other words, profits from the sale of investments held less than a year are taxed at your highest rate based on your adjusted gross income.
Here are the current and future tax tables for short-term and long-term capital gains taxes on cryptocurrency:
Cryptocurrency Long-term Capital Gains Tax Table 2024
| Tax Rate | Single | Married Filing Joint |
|---|---|---|
| 0% | $0 to $47,025 | $0 to $94,050 |
| 15% | $47,026 to $518,900 | $94,051 to $583,750 |
| 20% | Over $518,900 | Over $583,750 |
Cryptocurrency Income Tax Table 2024
| Tax rate | Single | Married Filing Jointly |
|---|---|---|
| 0% | $0 to $11,925 | $0 to $23,850 |
| 12% | $11,926 to $48,475 | $23,851 to $96,950 |
| 22% | $48,476 to $103,350 | $96,951 to $206,700 |
| 24% | $103,351 to $197,300 | $206,701 to $394,600 |
| 32% | $197,301 to $250,525 | $394,601 to $501,050 |
| 35% | $250,526 to $626,350 | $501,050 to $751,600 |
| 37% | $626,350 and up | $751,600 and up |
These tax rates are also updated for 2025. Here’s the new 2025 tax rates for capital gains and income taxes:
Cryptocurrency Long-term Capital Gains Tax Table 2025
| Tax Rate | Single | Married Filing Jointly |
|---|---|---|
| 0% | $0 to $48,350 | $0 to $96,700 |
| 15% | $48,351 to $533,400 | $96,701 to $600,050 |
| 20% | Over $533,401 | Over $600,050 |
Cryptocurrency Income Tax Table 2025
| Tax Rate | Single | Married Filing Jointly |
|---|---|---|
| 10% | $0 to $11,600 | $0 to $23,200 |
| 12% | $11,601 to $47,150 | $23,201 to $94,300 |
| 22% | $47,151 to $100,525 | $94,301 to $201,050 |
| 24% | $100,526 to $191,950 | $201,051 to $383,900 |
| 32% | $191,951 to $243,725 | $383,901 to $487,450 |
| 35% | $243,726 to $609,350 | $487,451 to $731,200 |
| 37% | $609,351 or more | $731,201 or more |
Strategies for Managing Crypto Tax Obligations
Crypto taxes can be confusing, but there are steps you can take to make them less of a headache.
Keep Your Own Records
While the IRS will eventually require crypto exchanges to report your transactions and provide you with cost basis information on your crypto trades — it’s a good idea to also keep your own records. This may mean writing down your purchase and sell prices on all digital assets — as well as keeping records of your income through activities like mining or staking.
Use Crypto Tax Software
There are a few robust crypto tax software services available today that can help you automatically track all of your cryptocurrency activity — including both centralized and decentralized exchange activity. This software takes the guesswork out of your crypto tracking–and can even produce IRS-acceptable reports for your tax return.
Consult a Tax Advisor
If you want to make sure you’re staying compliant with the IRS and not paying more in taxes than you should — you might consider working with a licensed tax professional. Tax pros like CPAs and Enrolled Agents can help you navigate confusing tax laws and keep you out of trouble with crypto taxes.
Bottom Line
As of now, and for those filing their taxes by the April 15, 2025, deadline, the new crypto tax regulations should have no effect on how you report crypto transactions on your tax returns.
If the new regulations go into effect, tracking your crypto earnings, losses and cost basis should be easier, although you’ll need to reconcile your own records with the 1099 forms you receive from your crypto broker or trading platforms.
Jacob Wade contributed to the reporting of this article.
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- Federal Register. 2023. "Gross Proceeds and Basis Reporting by Brokers and Determination of Amount Realized and Basis for Digital Asset Transactions."
- IRS. 2024. "Digital Assets."
- IRS. 2024. "Treasury and IRS announce that businesses do not have to report certain transactions involving digital assets until regulations are issued."
- IRS. "IRS releases tax inflation adjustments for tax year 2025"
- Federal Register. "Gross Proceeds and Basis Reporting by Brokers and Determination of Amount Realized and Basis for Digital Asset Transactions"
- U.S. Department of the Treasury. "U.S. Department of the Treasury, IRS Release Final Regulations Implementing Bipartisan Tax Reporting Requirements for Sales and Exchanges of Digital Assets"
