How to report crypto taxes in the US to IRS for your Haru Invest earnings (2023 Guide)

Crypto Taxes in US and the IRS

In the United States, cryptocurrencies are considered property for tax purposes and the gains and losses from the sale of cryptocurrencies must be reported on your tax return. It's important to report your cryptocurrency transactions accurately to avoid paying too much or too little in taxes and to avoid potential penalties from the Internal Revenue Service (IRS).

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Determining the cost basis

The cost basis of your cryptocurrencies is the original price that you paid for the cryptocurrency, and it's used to determine your capital gains or losses. If you bought your cryptocurrency at different times and prices, you'll need to calculate the cost basis for each individual transaction. The date of the transaction is also important to determine as the IRS only taxes capital gains and losses if they have been realized.

Lack of 1099 Forms from Exchanges

Cryptocurrency exchanges are not required to issue 1099 forms, which are commonly used to report income and gains to the IRS. This means that it is up to the individual taxpayer to keep accurate records of their cryptocurrency transactions.

Forms for Reporting Crypto Taxes

Form 8949 is used to report capital gains and losses from the sale of property, including cryptocurrencies. On Form 8949, you'll need to list each individual cryptocurrency transaction, including the date of the transaction, the cost basis, and the sales price. Schedule D summarizes all of your capital gains and losses from Form 8949 and shows the total capital gains and losses for the year, which will be used to calculate your taxable income.

You may also need to pay taxes on other cryptocurrency-related income, such as mining or staking rewards. This income should be reported as "other income" on your tax return.

Crypto tax calculator

You can use the following crypto tax calculator:

How to report taxes with Haru Invest

Getting your tax data with Haru Invest is super easy!

In the "Account" section there is a menu which contains a CSV file with downloadable transactions for each year. After you download that file, you can import it to Koinly which should help you calculate all the details automatically. A detailed guide for Koinly can be found here.

Alternatively, you can also use CoinTracking (which since January 2023 is an official partner of Haru Invest) and register for their services with -10% promotional discount as a Haru Invest member.

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DISCLAIMER: The content of this webpage is not an investment advice and does not constitute any offer or solicitation to offer or recommendation of any investment product.