New Crypto Tax Rules Explained: What You Need to Do Before January 1st

In this video, I break down the 2025 crypto tax changes and explain what you need to do before January 1st, 2025 to stay compliant without the stress. 💼💰

Here’s what we’ll cover:

1️⃣ New Tax Method: The IRS is shifting from universal accounting to wallet-by-wallet accounting starting in 2025. I’ll explain how this change affects how you calculate your crypto gains and losses.

2️⃣ Safe Harbor Plan: If you’ve used the old method, you need to choose how to allocate your cost basis and sign a document by the end of this year to take advantage of the Safe Harbor plan. I’ll walk you through how to complete and store the Digital Asset Allocation Plan for your records.

3️⃣ FIFO Requirement: Starting in 2025, FIFO (First In, First Out) will be the default method for calculating your gains, but I’ll explain how you can still use other methods like HIFO or LIFO with proper documentation.

4️⃣ Form 1099-DA: Learn how the introduction of Form 1099-DA in 2025 will affect you, as exchanges will start reporting your crypto proceeds for the first time.

I also summarize the guidance from Crypto Tax Girl (Laura Walter), who provides more detailed instructions on how to navigate these changes.

Don’t panic—I’ll break it down in easy-to-understand steps and share resources to help you get everything done before the deadline. 🌟

Here is the link to Laura’s video:
@cryptotaxgirl
BIG CHANGES COMING FOR CRYPTO TAXES IN 2025!
https://www.youtube.com/watch?v=oaJh6k1QoPk

Here is the link to Laura’s article :
UNDERSTANDING THE SAFE HARBOR PLAN, REV PROC 2024-28, AND 2025 CRYPTO TAX REPORTING UPDATES
https://cryptotaxgirl.com/blog/understanding-the-safe-harbor-plan-rev-proc-2024-28-and-2025-crypto-tax-reporting-updates/

Here is the link to Laura’s instructions:
SAFE HARBOR INSTRUCTIONS
https://cryptotaxgirl.com/blog/safe-harbor-instructions/

Here is a direct Link to the form:
https://cryptotaxgirl.com/wp-content/uploads/2024/12/Digital-Asset-Allocation-Plan_CryptoTaxGirl.pdf

Laura’s Web Site: https://cryptotaxgirl.com/
Crypto Tax Course: https://cryptotaxgirl.com/learn
Twitter: https://twitter.com/CryptoTaxGirl

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💡 DISCLAIMER: This video is for educational purposes only and should not be considered financial advice. Always do your own research before investing in cryptocurrencies.