Kraken, a leading crypto exchange, has filed 56 million crypto-transaction forms with the US Internal Revenue Service (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 newly introduced Form 1099-DAs exceeded the $600 threshold, which triggers reporting for non-employee compensation, and 74% were for less than $50. Each form also requires reconciliation by the taxpayer, which can be time-consuming and costly, especially considering that standard tax software does not handle crypto transactions.
Kraken estimates that the additional burden on active crypto holders can range from $250 to $500 per year, excluding standard filing costs. The Tax Foundation estimates that individual returns already cost Americans a combined $146 billion in time and expenses, while the National Taxpayers Union Foundation reports that the average time for non-business filers is around 13 hours and $290 per return.
The lack of a de minimis exemption for crypto payments and the treatment of staking rewards as ordinary income at the moment of receipt are two key issues contributing to the reporting burden. Kraken argues that a broader inflation-indexed exemption, paired with anti-abuse guardrails, is necessary to address these challenges. The company is also advocating for legislation that would allow taxpayers to choose when staking rewards are taxed, either at receipt or at sale.