1. If you had losses from selling crypto, you should report those losses. Note that any capital losses over $3,000 can be carried forward and offset other gains in future tax years. By not marking these losses, you could be paying more than necessary in the following years.
2. Exchanging one crypto for another (including NFTs) is taxable. So are crypto rewards. Just because it’s not cryptocurrency, doesn’t mean that it’s not taxable. Same with rewards — just because you didn’t buy it yourself, doesn’t mean that it doesn’t count as income (or gains, depending on the situation). Don’t get penalized because you missed these pieces of the puzzle.
3. Depending on if you held your crypto for more or less than one year, you could be taxed differently. Gains made in less than a year are taxed at your ordinary rate. But long-term gains (made if you held a crypto for more than a year) receive a preferential tax rate. Watch the video above for more detail.
4. If you only bought crypto, you can answer “no” on digital assets. This year’s IRS 1040 has a question about digital assets you will need to answer. If you sold, received as a reward or payment, or otherwise disposed of the digital asset, you’ll need to mark it “yes”. But if you only purchased the asset, held it without selling, or transferred it to your own wallet, you can mark this question “no”.

Even if you filed taxes for your crypto last year, it’s likely that this year will not look the same. That’s why it’s so important to stay up-to-date on any changes and use tools like CoinTracker to make sure the process is as smooth as possible. We’ve partnered with CoinTracker to offer eToro users 10% off* of their tax preparation plans. Click on the link below to take advantage of this offer today.

Trading may have tax consequences. eToro does not offer tax advice. Please consult with a tax professional.