As crypto regulations continue to evolve in the U.S., crypto reporting has experienced a seismic shift with the introduction of Form 1099-DA. Introduced in 2025, this new form has changed the way crypto assets are reported for tax purposes, promoting greater transparency between exchanges, brokers, and the IRS. Since investors will come across this new form sooner rather than later, it’s important that we get to know about them. In this post, we will break down what Form 1099-DA is, what investors need to know about it, and how you can prepare yourself for crypto accounting and reporting to match this new development.
What is Form 1099-DA?
Form 1099-DA, officially known as the “Digital Asset Proceeds From Broker Transactions,” is a form introduced by the Inland Revenue Service (IRS) in 2025. The primary purpose of the form is to track and report taxable digital asset transactions to the IRS, similar to how Form 1099-B reports stock transactions to the IRS.
What information does Form 1099-DA include?
Under the current regulations, those who facilitate digital asset transactions and verify customer identities (i.e., digital asset brokers) are required to issue the form. In the new form, brokers are required to report major details that include
- Purchase price and date of acquisition of the digital asset
- Sale price and date of disposition
- Specific identification of the digital assets involved
- Gross proceeds from sales and exchanges
- Cost basis information for calculating capital gains and losses
- Taxpayer identification information
How can you reconcile Form 1099-DA with your records?
Thanks to the introduction of Form 1099-DA, crypto investors can now receive standardized reports of transactions directly from exchanges and brokers. While this brings investors one step closer to clearer tax reporting and accounting. But despite the clarity, reconciling the new form with your own records is to ensure accurate records, compliance, and avoiding overpaying.
Here are the steps you can take for effective reconciliation:
- Carefully reviewing the information contained in Form 1099-DA (and what it doesn’t)
- Gathering all your crypto data (e.g., wallet activity, exchange transaction history) to get a complete picture of your activity
- Consolidate all your transaction data into a single platform and match your transactions with the 1099-DA.
- Identify missing transactions and correct any misclassifications.
- Review your corrections before filing your returns.
- Work with a cryptocurrency accountant to ensure that your reporting aligns with IRS expectations.
What happens if you ignore Form 1099-DA?
With the rollout of Form 1099-DA, the IRS will now receive standardized reports of your crypto activity directly from exchanges and brokers. Therefore, when you make your tax filings, you need to make sure that they align with the information in the form. If the information doesn’t align, it can trigger unnecessary scrutiny from the IRS, which can incur penalties for inaccurate reporting, interest on unpaid taxes, and additional fines for negligence.
Conclusion
The introduction of the Form 1099-DA marks a major shift in how crypto activity is monitored and reported by the IRS. Considering the importance of the new form, ignoring it can mean information mismatch, missed opportunities, penalties, and unnecessary IRS scrutiny. The key is to treat Form-1099-DA as a starting point and to work with a crypto CPA to make sure everything is on the up and up.
At Onchain Accounting, we specialize in helping investors get their reporting on track. From reconciling exchange data to correcting misclassifications and preparing audit reports, our team can make sure that your accounts are accurate, complete, and aligned with IRS requirements. Take control of your crypto accounting and invest with confidence with Onchain Accounting by your side.
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