The IRS is making big changes starting Jan 1, 2025, and if you don’t prep now, you could pay more in crypto taxes or face penalties. Here’s what you need to do before the year-end to avoid penalties, save money, and stay ahead of the game.

Understand Crypto Tax Basics

At a high level, the following transactions lead to taxable events.

• Selling crypto for fiat

• Trading one cryptocurrency for another

• Spending crypto on goods or services

• Earning crypto through staking, mining, or rewards

• Receiving airdrops or hard forks

If you have engaged in any of these activities in 2024, you will likely need to file Form 8949, Schedule D, or Schedule 1 with your taxes next year.

Non-taxable transactions include transfers between your own wallets or exchange accounts, and sending or receiving crypto gifts. Even though these are not taxable, you still need to track them for accurate record-keeping.

Use Crypto Tax Software

Today, most cryptocurrency exchanges don’t send you detailed tax forms like stock brokers. However, you are still responsible for accurately tracking and reporting your crypto gains and losses. Manually calculating crypto gains and losses is nearly impossible, especially if you have numerous transactions across multiple wallets & exchanges. You can use a reputed crypto tax software tool to automate this process.

Crypto tax software tools connect with your wallets and exchanges (read-only access), automatically calculate gains and losses, and generate necessary tax forms like Form 8949, Schedule D, Schedule 1, and other reports you need to submit with your tax return.

Set Aside Funds for Taxes

Made crypto profits this year? Congratulations! But remember, the IRS expects a cut of those gains.

A good rule of thumb is to set aside 25% - 30% of your profits in cash or stablecoins to cover the upcoming tax bill. (In some cases, these percentages can be as high as 37%)

If you have profited over $100,000 in crypto, consider hiring a qualified CPA to project your tax liability. This will ensure you are not caught off guard when tax season rolls around.
Harvest Crypto Losses to Offset Crypto Gains
If some of your investments are underwater (the market value is below how much you paid for the investment), you can consider selling these positions before the year-end to harvest losses. These losses can help you offset current-year crypto gains and even carry forward these losses to the future in some cases. Make sure to tax loss harvest before December 31, 2024, to take advantage of the strategy and reduce your 2024 tax bill.

Switch to the Per-Wallet Tracking Method

Starting January 1, 2025, the IRS will no longer allow the Universal cost basis tracking method for crypto assets. Instead, you must use the Per-wallet method. (Rev. Proc. 2024-28)

Here’s the difference:

• Universal Method: Assumes you have one giant wallet. You could sell crypto from one wallet but report it as sold from another to minimize taxes. Ex: Wallet A and Wallet B have 1 BTC each. You sell 1 BTC at wallet B. For tax purposes, you can say you sold the BTC at Wallet A.

• Per-Wallet Method: Requires you to report transactions based on the specific wallet used. Ex: Wallet A and Wallet B has 1 BTC. You sell 1 BTC at wallet B. For tax purposes, you can only say you sold the BTC at Wallet B.

If you have been using the Universal method, make sure to transition into Per-wallet method by December 31, 2024, to stay compliant. Ignoring this change could result in penalties in the future.
#CryptoTaxes2025
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Crypto enthusiasts, buckle up! As Brazil's Federal Revenue Service (RFB) keeps its watchful eye on the booming digital asset market, staying compliant in 2025 is non-negotiable. Whether you're a casual holder or a seasoned trader, here's what you must know to keep your records clean and your penalties nonexistent.
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🧾 Who Needs to Declare?
Under RFB Normative Instruction No. 1,888/2019, crypto holders must report their assets if their acquisition cost per category exceeds R$6,000.
🔍 Example:
If you hold R$5,500 in Bitcoin and R$4,000 in Ethereum, you're off the hook – no reporting needed.
But if your BTC holding hits R$6,100, it's time to disclose those coins!
💡 Pro Tip: The threshold is based on the acquisition cost, not the current market value. Price pumps won’t matter unless you sell!
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💰 Selling? Watch Out for This Rule!
If your monthly profits from crypto sales exceed R$40,000, you'll need to calculate your capital gains and pay taxes.
📊 How It’s Calculated:
1. Subtract the purchase price from the sale price.
2. Apply tax rates between 15% and 22.5%, depending on your profit margin.
🕒 Deadline: The tax must be paid by the last working day of the following month after your transaction.
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🤔 What About Peer-to-Peer Trades?
Think you're in the clear because you’re avoiding exchanges? Think again! Peer-to-peer transactions aren’t exempt from reporting. Thanks to blockchain technology and the RFB’s advanced tools like DeCripto, all transactions are traceable – domestically and globally.
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🛡️ Stay Ahead of the Game
Here’s how to stay compliant and avoid penalties:
1. Record Everything: Track every buy, sell, and transfer – including dates, quantities, and prices.
2. Stay Updated: Familiarize yourself with tax obligations, even for unrealized gains.
3. Pay on Time: Don’t miss tax deadlines or underestimate the RFB's reach!
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🚀 Why Transparency Matters
With crypto adoption at an all-time high, the Federal Revenue Service is ramping up its scrutiny. Non-compliance could lead to hefty fines or worse. By adhering to these regulations, you're not only protecting your wallet but also contributing to the legitimacy of the crypto market.
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💬 Are you ready to declare your crypto like a pro in 2025? Share your thoughts below!
Stay compliant, stay safe, and keep riding the crypto wave. 🌊
#CryptoTaxes2025 #CryptoOnBinance #TaxCompliance #AltcoinMarketWatch #Write2Earn!
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