Kraken, a leading crypto exchange, has filed 56 million crypto-transaction forms with the US Internal Revenue Service 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, while 74% were for less than $50. Each form also requires the customer to reconcile the transaction, resulting in a significant burden on taxpayers, particularly when standard tax software does not support crypto transactions.
Kraken estimates that active crypto holders may incur additional costs of $250-$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, while the National Taxpayers Union Foundation reports that the average time for non-business filers is approximately 13 hours and $290 per return. Kraken identifies two key issues with the tax code: 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 argues that these issues result in a significant reporting burden and proposes legislation to introduce a broader inflation-indexed exemption and to allow taxpayers to elect when staking rewards are taxed.