Cryptocurrency and NFTs (non-fungible tokens) continue to surge in popularity, transforming how we invest, transact, and create digital art. But with growth comes tax responsibilities that many U.S. taxpayers still struggle to understand. Whether you’re a seasoned crypto trader, an NFT artist, or a curious newcomer, getting your taxes right in 2025 is crucial—especially as the IRS sharpens its focus on crypto tax compliance.
Below, we’ve compiled a detailed checklist to help you navigate NFT taxes, crypto capital gains, and compliance with the latest IRS guidelines for crypto.
Before diving into details, it’s essential to understand the crypto activities you’ve engaged in throughout 2024 leading into 2025:
Each category can have different tax treatments—e.g., crypto capital gains vs. ordinary income—so identifying your activities upfront ensures accurate tax filing.
Although the IRS has been issuing crypto-related notices since 2014, the rules continue to evolve. For 2025, the Infrastructure Investment and Jobs Act has heightened reporting requirements for crypto “brokers,” meaning more robust information-gathering by exchanges. While the official regulations are still in flux, we know new forms and fields will increasingly ask taxpayers about digital assets.
One of the biggest challenges in crypto tax compliance is maintaining clear records, especially if you’ve traded on multiple platforms.
Most crypto exchanges provide transaction histories. Download these regularly—do not rely on them staying online indefinitely or retaining old data. If an exchange closes or restricts your account, you risk losing crucial tax documentation.
Even if you simply move Bitcoin from one personal wallet to another, it’s wise to note the transaction. While such transfers don’t create tax events, accurate records help validate your overall holdings and cost basis across wallets.
The IRS classifies most crypto and NFT sales under capital gains treatment, unless you earned them as income first. Make sure you identify:
Every time you trade or mint, you’re likely paying gas fees or transaction fees. Fortunately, these can often be added to the cost basis or deducted from proceeds, depending on the nature of the transaction:
Though seemingly small, consistent fees can add up quickly, especially during peak network congestion. Properly tracking gas fees is crucial for precise capital gains calculations and to avoid overpaying taxes.
As the IRS tightens reporting rules, many U.S.-based exchanges are required to issue Form 1099-B or other variants (1099-MISC, 1099-K) if you meet certain thresholds. If you’ve received any 1099 form:
If your exchange doesn’t provide 1099 forms, you’re still responsible for self-reporting. The IRS question on digital assets (on Form 1040) asks if you’ve received, sold, or otherwise disposed of any crypto or NFTs. Answer honestly—it’s not worth risking penalties over unreported gains.
If your crypto portfolio took a hit in 2024, you might have capital losses that can offset capital gains on your 2025 return. This process, known as tax-loss harvesting, can significantly reduce your overall tax liability. Even if you didn’t offset them in 2024, you might carry the losses into 2025 or beyond.
If you still have leftover losses, they can reduce the other category of gains and even offset up to $3,000 of ordinary income. Ensuring you track your losses properly could save you thousands in taxes.
Federal taxes aren’t the whole story. Many states have their own rules for crypto tax compliance and NFT taxes:
If you used foreign-based exchanges or hold crypto assets in offshore wallets, you may need to file FBAR (Report of Foreign Bank and Financial Accounts) or FATCA reports (Form 8938) if your balances exceed certain thresholds. These forms are separate from your standard 1040 and can carry stiff penalties if ignored. U.S. taxpayers must disclose global holdings, including crypto, if they meet the filing requirements.
Given the complexity of crypto capital gains and NFT taxes, many individuals and businesses now rely on specialized software—often incorporating AI technology—to handle the data crunch. Rather than juggling spreadsheets or paying high hourly fees for manual calculations:
Combining AI-driven precision with expert advice is often the best route, particularly if you’re dealing with large transactions, cross-state issues, or intricate NFT activity.
Tax compliance is not just about year-end or the filing season. With crypto markets evolving rapidly, you want to minimize surprises next year:
Dealing with crypto taxes and NFT taxes doesn’t have to be a daunting task—especially when you arm yourself with up-to-date IRS guidelines, meticulous record-keeping, and the right mix of AI tax software and professional advice. Our 2025 Crypto & NFT Tax Compliance Checklist covers the foundational steps you need to prepare your tax return confidently and stay on the right side of IRS regulations.
If you’re looking for a streamlined way to manage all your crypto tax compliance needs—from tracking capital gains to properly reporting NFT sales—Bizora AI has you covered. With real-time gain/loss calculations, and multi-state capabilities, Bizora AI can help you file faster and more accurately while maximizing deductions.
Start planning now to avoid tax season stress—your future (compliant) self will thank you!