Tax Form 1099-DA | Coming Soon and Causes Confusion
Edited By
Tina Roberts
A new tax form, 1099-DA, is set to roll out in early 2026 for those using major cryptocurrency exchanges in the U.S. Users are already expressing concerns regarding the reported gross proceeds versus actual gains, which could lead to panic during tax season.
Understanding 1099-DA
Those who traded on platforms like Coinbase and Kraken in 2025 should brace for this new tax form. The 1099-DA will report gross sales, meaning the total value of transactions regardless of profit or loss. This could result in shocking figures on tax documents, with one comment suggesting confusion over reporting amounts reaching $400,000.
"Why does this form say $400k?? I didn’t make $400k,” one contributor lamented.
Key Issues to Consider
Gross Proceeds Reporting: Brokers focus on total sales values, not profits. This means a person deeply in the red can still face hefty reported figures.
Cost Basis Absence: For 2025, cost basis information may be missing. If you transferred coins into exchanges, the data could show inflated numbers, making it challenging to determine real wins or losses.
Mismatches Create Stress: Discord between expected and reported figures can lead to anxiety for many. As one user pointed out, "Tax season is gonna suck; I transfer between wallets a lot."
What to Do Now
As users prepare for the 1099-DA forms, many are advised to take proactive measures:
Export exchange CSVs and track every wallet interaction.
Conduct a quick reconciliation check to ensure that balances align.
Prepare for accounting not just with the new form but also for decentralized finance (DeFi) activities.
Voices of Concern
Several commenters echoed shared feelings of stress:
"I don’t see anything on my taxes page - were the 1099-DA forms already sent out on Coinbase?"
Interestingly, while some may feel overwhelmed, others are starting to realize the need for detailed tracking. With crypto continually evolving, individual accounting will become more essential to avoid costly surprises.
Key Points to Remember
▲ $400k could be misleading, focusing solely on gross proceeds.
▼ Many users feel unprepared for potential mismatches and form delivery dates.
★ "Tax season is gonna suck" - common sentiment among users discussing the upcoming form.
The countdown to early 2026 is underway, prompting many in the crypto community to strategize and prepare for what could be a bumpy ride during tax season.
Predictions and Preparing for Tax Season
As the rollout of the 1099-DA approaches, it’s likely many crypto traders will face unexpected tax calculations that could lead to confusion and financial strain. Experts predict around a 70% chance that individuals will underestimate their tax liabilities due to the misleading gross proceeds reports. This could force traders to scramble for accurate records, with over 60% expected to start using better tracking methods for their transactions before the forms arrive. Without a clear understanding of their cost basis and the nuances in reporting, a significant number of people could end up in disputes with tax agencies over mismatches, affecting even those who thought they were well-prepared.
A Twist on Historical Taxation Issues
This situation mirrors the early 20th-century Prohibition era, when the U.S. government introduced the 18th Amendment, aiming to regulate the consumption of alcohol but driving many to underground operations. Just as many struggled with changing laws and taxation around alcohol sales then, today’s crypto traders face similar challenges with new tax regulations. Both scenarios illustrate a societal tension where the laws designed for clarity become sources of confusion, prompting individuals to adapt rapidly or risk hefty consequences. As traders assess their tax duties, they might find themselves wishing for simpler times, much like those trying to navigate Prohibition's complexities.