Free Cryptocurrency Tax Software

E-file Crypto Income, Mining, and Investments to the IRS

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How to file with crypto investment income

1. Enter your 1099-B information

Add the information from the 1099-B you received from your crypto exchange on FreeTaxUSA.

2. Finish your return on FreetaxUSA

After your crypto income is added, we'll walk you through the rest.

Our free federal service supports investment, wages, mining, and other transactions.

1. Import your crypto activity

Connect your exchange and import your crypto activity into a service like Koinly, TokenTax, or TaxBit.

2. Generate tax Form 8949

These services will determine your capital gains and generate a Form 8949 PDF.

3. Prepare and file on FreetaxUSA

Enter the information from your finalized tax form on FreeTaxUSA. We'll walk you through the rest.

Our free federal service supports investment, wages, mining, and other transactions.

Crypto Filing FAQ's

Yes, Income paid or earned by buying, selling, exchanging, mining or otherwise acquired crypto is subject to taxation by the IRS. You can read the direction the IRS gave in Bulletin 2014-21.

Note: The IRS has additional cryptocurrency reporting requirements. For additional information see the FAQs on the IRS website.

Where you enter crypto income depends on how you earned the income. First, you must determine whether the crypto was earned from investment, mining, wages, and other income.

Crypto is not considered to be a currency by the IRS but is considered property. As property can have capital gains and losses, crypto can, too. The capital gains are taxed depending on the length of ownership. If you own the crypto less than 12 months before you sell it, it will be considered short term. If you own crypto 12 months or more before you sell it, it will be considered long term, and is usually taxed at a lower rate than short term.

An example of capital gain is if you bought $1,000 worth of bitcoin in January and sold it after a few months, or in June, for $2,000, you would have a $1,000 capital gain. Then, depending on your tax bracket, you would be taxed a certain percentage based on this increase.

Other taxable events include trading crypto to fiat currency or for another crypto, spending crypto, or earning crypto from mining.

You would not be taxed if you bought and held crypto in your wallet. Also, you would not be taxed if you transferred crypto from one wallet to another as long as you own both wallets.

Taxpayers using virtual currency need a way to track transactions to help make the tax filing process easier. If not properly reported, there could be interest or penalties. Depending on how many transactions you complete in a year, you can track each transaction on your own spreadsheet, or, for more frequent transactions, it might be best to go with a crypto tracking software (like koinly, tokentax, or taxbit). Once you have imported your information, you will be able to get a report that can easily be used to fill in the information necessary to e-file your taxes.

No, currently you cannot pay for your taxes or your tax fees with crypto.

When you're ready to file your taxes, sign in to your account, let our tax software guide you, and e-file your tax return with the IRS.

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