Kraken, a 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 newly introduced Form 1099-DA, which accounts for 8.5% of the total forms, has a reporting threshold of $600 for non-employee compensation, while 74% of the forms were for less than $50. Each form is also sent to the customer, resulting in a reconciliation task for the taxpayer.
Standard tax software does not support crypto transactions, and Kraken estimates that active crypto holders will incur an additional burden of $250-$500 per year for specialized 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 exchange attributes the problems to two key issues in 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. Kraken 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.