Kraken, a cryptocurrency exchange, has filed 56 million cryptocurrency transaction forms with the US Internal Revenue Service (IRS) for the 2025 tax year. Approximately 18.5 million of these forms were for transactions valued at less than $1, and over half were for $10 or less.
The newly introduced Form 1099-DA, which accounts for 8.5% of the total, exceeds the $600 threshold that triggers reporting for non-employee compensation, with 74% of the forms being for less than $50. Each form is also sent to the customer, resulting in a reconciliation task for the taxpayer, and standard tax software does not handle cryptocurrency transactions.
Kraken estimates that the additional burden on an active cryptocurrency holder is between $250 and $500 per year for dedicated tax software, on top of standard filing costs. The Tax Foundation estimates that individual returns already cost Americans a combined $146 billion in time and expenses. The National Taxpayers Union Foundation reports that the average time for non-business filers is approximately 13 hours and $290 per return.
Brokers reporting for 2025 provide gross proceeds without cost basis, resulting in thousands of client inquiries about forms that only capture one side of the calculation. Kraken identifies two issues with the tax code: the lack of a minimum threshold for cryptocurrency payments, which can trigger a taxable event even for small purchases, and staking rewards being treated as ordinary income at the moment of receipt. The exchange 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.