Our 2025 Crypto & NFT Tax Compliance Checklist

Adam Tahir
Mar 26
7 min read

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.

1. Clarify Your Crypto Activity

Before diving into details, it’s essential to understand the crypto activities you’ve engaged in throughout 2024 leading into 2025:

Trades: Did you buy, sell, or swap cryptocurrencies (e.g., Bitcoin, Ethereum)?
Staking/Rewards: Have you earned staking rewards or interest from DeFi protocols?
Mining: Are you a crypto miner or part of a mining pool earning block rewards?
NFTs: Did you mint, buy, or sell non-fungible tokens on any marketplace?
Airdrops & Forks: Have you received tokens from forks (e.g., a chain split) or marketing airdrops?

Each category can have different tax treatments—e.g., crypto capital gains vs. ordinary income—so identifying your activities upfront ensures accurate tax filing.

Tip: Maintaining detailed records of your crypto trades and NFT transactions is vital. Many individuals rely on spreadsheets or specialized crypto record-keeping apps, but a comprehensive AI tax software like Bizora AI can automate much of the process.

2. Understand IRS Guidelines for Crypto & NFTs

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.

Capital Gains Rules: Selling or exchanging crypto is typically taxed as capital gains (short-term or long-term), based on how long you held the asset.
NFT Taxation: NFTs are generally treated like other capital assets. However, if you create and sell an NFT (as an artist or content creator), you may owe income tax on the proceeds. If you buy and resell NFTs, you’ll likely face capital gains taxes on the profit.
Income from Crypto: Mining, staking, or airdrops are often taxed as ordinary income at the time you receive the assets, with subsequent sales taxed under capital gains rules.

Note: The IRS has specifically been scrutinizing NFT transactions for underreporting, especially when large sums are involved. If your NFT sales soared in 2024, be prepared to prove accurate valuations and cost basis.

3. Track Every Transaction for Accurate Reporting

One of the biggest challenges in crypto tax compliance is maintaining clear records, especially if you’ve traded on multiple platforms.

a) Capture Dates and Prices

Date & Time of each transaction (buy, sell, exchange).
Fair Market Value (FMV) in USD at that moment, crucial for both capital gains calculations and any ordinary income events.
Cost Basis: The amount you originally paid for the crypto or NFT (including fees). Properly tracking cost basis can reduce your taxable gains.

b) Keep Exchange Statements

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.

c) Document Wallet-to-Wallet Transfers

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.

Using Bizora AI? Bizora’s AI software can help you categorize your transaction. This not only streamlines your NFT taxes but can also spot discrepancies or missing data before tax season.

4. Determine Capital Gains vs. Ordinary Income

The IRS classifies most crypto and NFT sales under capital gains treatment, unless you earned them as income first. Make sure you identify:

Short-Term Capital Gains: If you held the asset for less than 12 months before selling, gains are taxed at your ordinary income tax rate.
Long-Term Capital Gains: If you held more than 12 months, you may benefit from lower tax rates (0%, 15%, or 20%, depending on your total income).
Ordinary Income: Any crypto or NFTs received from mining, staking, airdrops, or initial creation. You recognize income at the FMV on the day received. Subsequent sales are subject to capital gains (or losses) from that new cost basis.

Example:

You mint an NFT and sell it immediately for $2,000. That $2,000 is taxable as ordinary income.
Later, if you buy an NFT at $1,000 and sell it at $1,500 after 6 months, you have a $500 short-term capital gain. If you had waited more than a year, it could be a long-term gain, often taxed at a more favorable rate.

5. Account for Gas Fees and Transaction Costs

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:

Buying Crypto or NFTs: If you pay a $50 gas fee while purchasing, your cost basis increases by $50.
Selling or Minting NFTs: Fees reduce your net proceeds, potentially lowering your taxable gain.

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.

6. Check for IRS 1099 Forms and Notices

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:

Cross-reference it with your own records to ensure there are no discrepancies.
Report the income and transactions shown—omitting them can trigger notices or audits.

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.

7. Offset Gains with Losses (If Applicable)

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.

Short-Term Losses offset short-term gains first.
Long-Term Losses offset long-term gains first.

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.

8. Understand State Tax Implications

Federal taxes aren’t the whole story. Many states have their own rules for crypto tax compliance and NFT taxes:

Some states have no personal income tax, but if you moved mid-year, you could owe taxes in multiple states.
Others might offer unique credits or incentives.
Ensure you review your state’s guidelines or consult a tax professional to avoid underreporting and possible penalties.

Using Bizora AI? Bizora’s built-in multi-state tax logic can simplify this by automatically apportioning transactions based on residency timelines and providing suggestions if your state offers relevant credits or incentives.

9. Verify Your International Transactions

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.

10. Use AI Tools and Professional Assistance

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:

AI Tax Platforms: Tools like Bizora AI automatically track your transactions in real time, identify tax events, and prepare accurate summaries for federal and state returns.
Tax Professionals: CPAs or enrolled agents familiar with crypto tax compliance can review your data, ensure accuracy, and provide guidance on complex situations like DeFi staking or yield farming.

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.

Bonus: Planning Ahead for 2026

Tax compliance is not just about year-end or the filing season. With crypto markets evolving rapidly, you want to minimize surprises next year:

Periodic Portfolio Reviews: Evaluate your trading activity and consider tax-loss harvesting or rebalancing before December 31.
Record Organization: Keep transaction data up to date and backed up.
Leverage AI Tax Solutions: By using Bizora AI or similar platforms year-round, you can catch potential compliance issues well before tax deadlines, reduce audit risks, and make smarter trading decisions with real-time tax insights.

Conclusion

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!