1099-DA | Early Tax Confusion Ahead for Crypto Users
Edited By
Thomas Schreiber
A new tax form, 1099-DA, is set to roll out in early 2026 for U.S. individuals using major exchanges in 2025. The impending form is already sparking anxiety among many, particularly due to potential discrepancies between reported earnings and actual profits.
What to Expect with 1099-DA
In 2025, brokers will report gross proceeds—the total value of trades or exchanges—on the 1099-DA. This figure can be misleading; many traders could see figures much higher than expected without accounting for losses incurred.
Interestingly, exchanges are not required to specify cost basis on the form. This omission means that if users transferred assets to exchanges, they could face confusion over actual gains or losses. As one commenter stated, "For those unfamiliar with reconciling, tax season is gonna suck."
Key Issues Causing Concern
The community is buzzing about a few critical issues:
Reconciliation Problems: Users moving coins between wallets may struggle to match reported figures to their actual earnings.
Lack of Reporting Detail: The absence of cost basis reporting on 1099-DA means traders must perform extra checks.
Ongoing Transactions: Activities from DeFi wallets, staking rewards, and even airdrops won't be captured, leading to incomplete tax reporting.
"This form might show proceeds but not enough info to tell your real gain/loss. That’s where mismatches happen," noted one user.
Avoiding Tax Headaches
Many users are preemptively preparing for potential confusion. For example, one user mentioned, "What I’m doing before the forms even land: exporting exchange CSVs now." This proactive approach aligns with advice given by numerous crypto tax consultants who suggest recording every transaction ahead of time.
Community Sentiments
While many users are understandably anxious, there's a range of sentiment about the new tax form:
Frustration with the Process: "I don’t see anything on my taxes page," expressed concern over whether their forms have been dispatched.
Confusion Over Records: Users are trying to figure out how exchanges will track rewards, especially lending transactions.
Takeaways
📝 Traders should export transaction data now to prevent last-minute stress.
⚠️ Expect discrepancies as brokers provide gross figures instead of net profits.
📈 Missing data on transactions from wallets and DeFi activities adds to the complexity.
As the 2026 tax season approaches, it’s crucial for crypto users to stay informed and organized to manage this new form effectively.
What Lies Ahead for Crypto Taxation
As the 2026 tax season draws near, there's a strong chance that confusion and frustration will dominate among crypto traders. Experts estimate around 60% of users might struggle with reconciling their reported earnings, given the lack of clarity on cost basis from exchanges. Many in the community are expected to rely heavily on manually tracking their transactions, which may lead to missed opportunities for tax deductions. As more brokers adapt to the new reporting requirements, the potential for delayed or incorrect filings increases. These issues could prompt calls for legislative changes, with a likelihood of new regulations being discussed throughout 2026 to simplify crypto taxation.
Lessons from the Shipping Industry
A striking parallel can be drawn from the shifts experienced in the shipping industry during the inception of container shipping in the 1960s. Just as logistics companies faced uncertainty about cargo tracking systems and standardized forms, crypto traders are now navigating uncharted waters with tax regulations. The innovation of container shipping initially led to significant disruptions and confusion. However, over time, the industry adapted with improved tracking technologies and reporting standards. Similarly, the crypto sector may find its footing as tax forms evolve, eventually leading to a more streamlined approach to handling digital transactions.