Crypto Tax Reporting: What You Need to Know About Tracking and Filing

When you buy, sell, or trade crypto tax reporting, the process of documenting cryptocurrency transactions for tax authorities like the IRS. Also known as cryptocurrency tax filing, it’s not just for traders—it’s for anyone who’s ever swapped ETH for NFTs, earned tokens from a DAO, or cashed out Bitcoin after a weekend flip. The IRS treats crypto like property, not currency. That means every trade, every airdrop, every fee paid in crypto creates a taxable event. Most people don’t realize this until they get a 1099 form they didn’t expect—or worse, an IRS notice.

What makes this messy is that blockchain tax compliance, the set of rules and practices ensuring your crypto activity meets legal reporting standards isn’t automated. Unlike stocks, where your broker sends you a 1099-B, crypto wallets don’t report to the government. You’re responsible for tracking every transaction: buys, sells, swaps, staking rewards, even gifts. Tools like Koinly or TokenTax help, but they only work if you input accurate data. Miss one small transfer, and you could be underreporting income. That’s not a typo—last year, the IRS sent over 12,000 letters to people who didn’t report crypto gains, and they’re just getting started.

And it’s not just about selling. If you used crypto wallet tracking, the practice of monitoring incoming and outgoing transactions across multiple wallets and exchanges to buy an NFT from a fellow artist, that’s a taxable sale. The value of the NFT at the time of purchase? That’s your cost basis. The price you paid in ETH? That’s your sale amount. The difference? Capital gain. Even if you didn’t convert to USD, the IRS still wants its cut. Same goes for earning crypto through freelance work or teaching a course paid in tokens. That’s ordinary income, and it’s taxable at your marginal rate.

Artists and creators are especially vulnerable because they often use crypto for payments, royalties, or NFT sales without realizing the tax implications. A painter who sells a digital piece for 0.5 BTC in January and sells that BTC for $18,000 in June? They owe taxes on the $18,000 minus the original value of the 0.5 BTC when received. No receipt? No problem—the IRS doesn’t care. They’ll use blockchain explorers to trace it. The good news? You don’t need to be an accountant. You just need to be organized. Keep records of dates, amounts, values in USD at time of transaction, and wallet addresses. Use free tools like Blockchair or Etherscan to pull historical prices. Save screenshots of trades. Document everything like you’re building a portfolio.

There’s no magic fix. Crypto tax reporting is tedious, but it’s not complicated. It’s just unfamiliar. Most people panic because they think they need to understand DeFi, staking pools, or gas fees to file. You don’t. You just need to know what you bought, what you sold, and what it was worth when you did it. The IRS doesn’t care about your favorite wallet app. They care about numbers. Get those right, and you’re ahead of 90% of crypto users.

Below, you’ll find real guides from artists, developers, and educators who’ve navigated crypto tax reporting without losing sleep. Whether you’re filing for the first time or cleaning up past mistakes, these posts break it down without jargon—no fluff, no theory, just what works.