Why are crypto exchanges required to report with Form 1099-K?

To further regulate the digital asset market, crypto exchange platforms, or simply, crypto exchanges are required to report with Form 1099-K and other forms. This will help PSEs and payment network entities report the crypto transactions and the amount paid to their customers/payees through crypto exchange transactions.

What is a 1099-K tax form?

The Form 1099-K states your cumulative amount traded in a tax year - that is, the total value of crypto that you have bought, sold, or traded on an exchange. This form is also known as a Payment Card and Third-Party Network Transactions Form.

What is a 1099-K & how does it work in 2022?

Prior to 2022, certain cryptocurrency exchanges issued Form 1099-K to customers with at least $20,000 in transaction volume and at least 200 transactions. Starting in the 2022 tax year, the threshold for 1099-K is lowering.

Will a 'crypto broker' need a 1099-B form in 2021?

As discussed earlier, the 2021 American infrastructure bill will make it mandatory for all cryptocurrency exchanges that are considered “brokers” to provide 1099-B forms. While 1099-B reporting is already mandatory for stockbrokers, there are potential issues that may arise for ‘crypto brokers’ due to cryptocurrency’s unique properties.