If you buy, sell, trade, or use digital assets such as cryptocurrency, digital tokens, or digital collectibles, the way you report these activities on your tax return is about to change in a major way. The Internal Revenue Service has introduced a new form called Form 1099‑DA, and it will affect millions of people beginning with transactions that occur in 2025.
This is one of the biggest updates to digital asset tax reporting since cryptocurrency first appeared on tax returns. Understanding what is coming now will save you stress later.
What Is Form 1099‑DA?
Form 1099‑DA is a new tax form that companies must send to both you and the Internal Revenue Service when you sell or exchange digital assets. It works much like the forms you already receive for stock sales, except it is designed specifically for digital assets.
This form will report:
- What you sold
- When you sold it
- How much you received
- Basic information about the account or wallet involved
This gives the Internal Revenue Service a clear record of your digital asset activity.
Why This Matters to You
1. The Internal Revenue Service will now receive your digital asset information automatically
In the past, many people reported their digital asset activity on their own, and the Internal Revenue Service had limited information to compare it to. With Form 1099‑DA, the agency will receive the same information that you receive. If your tax return does not match what the Internal Revenue Service receives, you may receive a notice asking for clarification or additional tax.
2. You may receive forms from platforms you did not expect
The government has expanded the definition of who must send these forms. It now includes not only traditional digital asset exchanges, but also certain online platforms that help people buy, sell, or trade digital assets. If you use several platforms, you may receive several forms.
3. You are still responsible for tracking your own costs
Form 1099‑DA reports what you received when you sold a digital asset, but it does not always report what you originally paid for it. You must still keep your own records of:
- How much you paid for each asset
- When you acquired it
- Transfers between your own wallets
- Any rewards, bonuses, or digital income you received
Without this information, it may be difficult to calculate your true gain or loss.
4. More people will be affected than ever before
Digital assets are no longer a niche investment. Professional publications report that more than one‑quarter of American adults now own some form of digital asset. As a result, many people who have never dealt with this type of reporting before will receive these forms for the first time.
When These Changes Begin
The new reporting rules apply to transactions that occur in 2025.
You will begin receiving Form 1099‑DA in early 2026.
This gives you time to prepare, but it is important to start organizing your records now.
What You Should Do Now
1. Keep better records of your digital asset activity
Save information about:
- What you bought
- What you sold
- How much you paid
- How much you received
- Wallet addresses and transfer histories
Good records will make tax time much easier.
2. Try to use fewer platforms if possible
The more platforms you use, the more forms you will receive and the more complicated your reporting becomes.
3. Download your transaction history regularly
Some platforms limit how far back you can download your history. Save your records now so you do not lose access later.
4. Talk with your tax professional early
Digital asset reporting is becoming more structured and more closely monitored. Early planning will help you avoid surprises and reduce the risk of receiving notices from the Internal Revenue Service.
The Bottom Line
Form 1099‑DA marks a major shift in how digital assets are reported and taxed. The government is moving digital assets into the same reporting system used for traditional investments, and this will bring more oversight, more forms, and more responsibility for taxpayers.
With good preparation and clear records, you can stay ahead of these changes and avoid unnecessary stress when tax season arrives.