Kraken, a cryptocurrency exchange, has filed 56 million forms with the IRS for the 2025 tax year, with approximately 18.5 million of these forms covering transactions valued at less than $1. Over half of the forms were for transactions worth $10 or less.
The company notes that only 8.5% of the new Form 1099-DAs exceeded the $600 threshold, and 74% were for less than $50. Each form is sent to the customer, resulting in a reconciliation task for the taxpayer. The lack of standard tax software handling crypto transactions adds an estimated $250-$500 to the annual tax filing costs for active crypto holders.
The Tax Foundation estimates that individual returns already cost Americans $146 billion in time and expenses. Kraken identifies two key issues: the lack of a de minimis exemption for crypto payments and the treatment of staking rewards as ordinary income at the moment of receipt. The company advocates for a broader inflation-indexed exemption and the option for taxpayers to choose when staking rewards are taxed, either at receipt or at sale.