You need professional tax help if your crypto transactions exceed $20,000 in gross proceeds or 200 trades per year, which triggers IRS reporting thresholds on Form 1099-B starting in 2025. If you mine cryptocurrency, you can depreciate your mining hardware over 5 years using Modified Accelerated Cost Recovery System (MACRS), which can reduce your tax bill by thousands depending on your equipment costs.
Keep in mind that converting tokens to wrapped versions (like ETH to WETH) counts as a taxable exchange under IRS Notice 2014-21, even though it feels like the same asset. File protective elections using Form 8886 by your original return due date if you’re uncertain about treatment of complex transactions like staking rewards or airdrops. Your best defense is keeping detailed records of every transaction with dates, amounts, and fair market values at the time of each trade. This documentation proves your reporting if the IRS comes asking questions later.