How to report crypto taxes: step-by-step for the US, UK, and EU
Step-by-step guide to reporting crypto taxes — gathering data, choosing a method, filling forms, and filing. Applies to US Form 8949 / UK CGT / EU jurisdictions. Not tax advice.
Answer first
Reporting crypto taxes follows the same pattern in most jurisdictions: (1) gather every transaction from every exchange and wallet, (2) reconcile into cost basis lots, (3) generate the required tax forms, (4) file with your annual return. Tax software (CoinTracker, Koinly, CoinLedger) automates steps 1-3. This is educational content, not tax advice — for anything non-trivial, work with a crypto-aware tax professional.
Step 1 — Gather transaction data
You need a complete transaction history from:
- Every centralized exchange (Coinbase, Kraken, Binance, etc.)
- Every wallet address you control (via block explorer or wallet export)
- Any DeFi protocols you interacted with
- Any NFT marketplaces
- Any staking or lending services
Most services offer CSV export or API access. Tax software connects via API and pulls automatically.
Step 2 — Reconcile and classify
Every transaction needs to be classified:
- Buy (establishes cost basis)
- Sell (triggers capital gain/loss)
- Swap (treated as sale + buy in most jurisdictions)
- Transfer between own wallets (not taxable)
- Staking reward (income at receipt)
- Airdrop (income at receipt)
- Spent on goods/services (disposal)
Tax software attempts this automatically but you should spot-check DeFi transactions — automated classification of complex protocol interactions is imperfect.
Step 3 — Generate tax forms
US:
- Form 8949 — each disposal listed individually (or aggregated with attached statement)
- Schedule D — totals from Form 8949
- Schedule 1 — income from staking/airdrops
- Schedule C — if mining/staking as a business
- Form 1099-DA — issued by exchanges starting 2025
UK:
- Self Assessment SA108 (capital gains supplement) for disposals
- SA100 main return for income items
EU: Country-specific — most Continental European jurisdictions have their own tax forms; Germany's is particularly different (>1 year hold = tax-free for individuals).
Canada:
- Schedule 3 for capital gains
- T1 general with the appropriate lines for income
Australia:
- myTax or ATO forms — CGT event calculations plus assessable income
Step 4 — File
File the return by your jurisdiction's deadline. Tax software typically exports directly to TurboTax (US), TaxSlayer, HMRC's self-assessment (UK), and similar. If you use an accountant, provide them the software-generated report as their starting point.
Common mistakes
- Missing wallet transactions. People remember exchanges but forget on-chain wallet activity. Import every wallet.
- Missing DeFi transactions. Every swap on a DEX is a disposal. Every liquidity provision has tax implications.
- Wrong cost basis method. FIFO vs specific-lot-identification vs LIFO all give different results. US default is FIFO unless you specifically identify lots.
- Underreporting airdrops. Airdrops are income at FMV when received. Ignoring them creates a problem later.
- Not reporting losses. Realizing losses can offset gains and (US) up to $3,000/year of ordinary income.
When to hire a crypto tax professional
- You've made >1,000 transactions in a year
- You use complex DeFi (Uniswap V3 concentrated liquidity, perp trading, lending protocols)
- You've been through an audit
- You've moved between jurisdictions
- You're being paid in crypto by a US company
A crypto-aware CPA is typically $500-$3,000 for a return depending on complexity. Not cheap; potentially much cheaper than an audit or a materially wrong filing.