Do I have to pay Taxes on my crypto?

Tax reporting can be daunting, but PayPal is on a mission to make reporting cryptocurrency taxes as seamless as possible.

Information provided by PayPal is not intended to be and should not be construed as tax advice. For questions about your specific tax situation, please consult a tax professional. 

Am I required to file taxes on my crypto?

Starting in 2020, the IRS added a question to the personal federal income tax form (1040) asking taxpayers, “At any time during the tax year, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?”

When answered “Yes,” the IRS would look for a Form 8949 filed by the taxpayer to report capital gain/loss for virtual currency transactions.

How do I file my crypto taxes?

Beginning in tax year 2025, the IRS requires US digital asset brokers like PayPal to report proceeds from digital asset dispositions on Form 1099-DA. If you engaged in a disposition like a sale or exchange of cryptocurrency in your PayPal wallet during the applicable tax year, PayPal will send you IRS Form 1099-DA by February 15. 

PayPal also provides its users with supplemental materials, including a year-end gain/loss statement and transaction summary detailing all dispositions for the year.

These documents detail the transaction-level activity you can use to complete your IRS Form 8949, which includes the date acquired, date disposed of, cost basis (included for user convenience), proceeds, and the resulting gain or loss.

If you have crypto assets outside of PayPal’s platform and subsequently dispose of the assets, PayPal will not have visibility into your information, and it is, therefore, your responsibility to track and report such information.

Visit How do I file my taxes for cryptocurrency? for more information.