Tax season is upon us, and it’s time to start asking the question on everyone’s minds this year: What do you need to do to accurately report cryptocurrency earnings to the IRS?
Coinbase is one of the largest crypto exchange platforms out there, with approximately 73 million verified users, according to their website.
Are you among the users who sold or converted crypto on Coinbase in 2021? If so, you may be asking if Coinbase will give you Form 1099, and what else you’ll need to prepare to pay your taxes this year. Let’s find out which tax documents Coinbase provides, how you can prepare your tax forms, and what Cointelli can do to help streamline the process.
Does Coinbase Issue 1099-Ks and Report to the IRS?
No, they stopped issuing the 1099-K form from the year 2021. Thus, they don’t report this form to the IRS.
Form 1099-K is issued if you received gross payments of more than $20,000 from third-party payment network transactions or credit card transactions. Coinbase used to issue 1099-Ks, however, many taxpayers ended up receiving IRS tax notices (CP 2000) due to the lack of accurate transaction information. This is because on the 1099-K form, only gross income larger than $20,000 was reported, without the relevant cost basis or fees.
However, this does not mean Coinbase doesn’t report to the IRS at all. Let’s find out what other tax documents Coinbase issues and reports to the IRS.
So, Does Coinbase Issue 1099-MISCs and Report to the IRS?
Yes; while Coinbase doesn’t issue 1099-Ks, they do issue the 1099-MISC form and report it to the IRS. You’ll receive the 1099-MISC form from Coinbase if you are a U.S. resident for tax purposes and earned $600 or more through staking, USDC rewards, and Coinbase Earn rewards, which are all considered miscellaneous income. This kind of income is classified under the ordinary income category as far as taxation. Please go here to learn more.
How To Report Crypto Transactions From Coinbase
Now that we’ve learned about the Coinbase tax documents, it’s time to generate your tax forms!
Here is where your friends at Cointelli can help.
As you can see above, Cointelli gives you very detailed instructions on how to import your transaction history from Coinbase.
After signing up for Cointelli, simply check out our step-by-step importing method, and then log onto your Coinbase account. From there, you create your own API key on Coinbase and copy and paste that into the page above.
Got any crypto tax questions? Ask us on Twitter! Our co-founder & crypto tax expert Daniel @Cointelli_Dan will answer you directly!