What Records You Must Keep for Crypto Taxes
Tax season is upon us, with the IRS opening their tax filing window on February 1, 2026. If you hold or trade cryptocurrency, you likely already know you need to report this to your local tax authorities (the IRS in the United States). But what documents do you need to have on hand?
You need to track your buying, selling, mining, airdrop, and staking activities for all of the cryptocurrency you own. While this may not seem like a lot, these documents can quickly pile up if you are day-trading cryptocurrency. Read on to learn more about the records you need to keep for crypto taxes.
1. Records of Buying and Selling Crypto
The most common way individuals owe taxes on cryptocurrency is when they sell it. As far as we know, most countries do not charge taxes for buying cryptocurrency, only when it is sold. So, you may be asking, why do you need to keep records of when you buy cryptocurrency?
Well, you pay taxes on crypto gains only, and gain tax benefits when you show losses, and the only way to prove either of these is by knowing what you bought and sold the cryptocurrency for.
For example, if you bought 1 BTC for $1000, and then later sold it for $800, this is a loss of $200. On the flip side, if you bought 1 BTC for $1000, and sold it for $10,000 this is a gain of $9000. In this case, you would pay capital gains taxes on the $9000 (in the United States).
Therefore, if you only purchase cryptocurrency this year, you don’t have to worry about paying taxes when you claim it, this is just tracking so you can monitor future losses and gains.
In our opinion, the best way to track these transactions is via screenshots or account statement documents provided by CEFI exchanges. If you do not use a CEFI exchange, then you should make your own spreadsheet for tracking your transactions for tax purposes.
Either way, download records of your transaction activity in order to have all the information you need for filing your taxes. Do note that even if you are trading one cryptocurrency for another, like Bitcoin for Ethereum, most governments want this data recorded in the US dollar equivalent at the time of the transaction for tax purposes.
2. Documents of Your Mining Activity
If you are a cryptocurrency miner, the crypto income you receive from this activity is taxed by your local government. We know these activities are difficult to track, but you must comply with tax laws.
The best way we’ve heard of for tracking these is to keep a mining rewards-only wallet, where all of your mining rewards are deposited. Keep track of the balance of this wallet, only cashing it out on a monthly/quarterly/yearly basis, documenting how much you remove each time. This way you can just add these amounts together at year-end and know exactly how much to claim on your taxes.
3. List of Airdrop/Other Crypto Receivables
This is where things begin to grow more muddled. While you may receive one or two crypto airdrops a year, therefore making your claim easy, if you accept crypto for goods and services, this can be difficult come tax season.
Our best advice is this: if you plan to accept cryptocurrency as payment, do so through a platform like PayPal, which can help track all of your transactions and make them easily reportable come year-end. If you are in the United States, payment apps like CashApp additionally have this ability. While you will still need to record any airdrops you receive separately, this will take some of the stress of tracking cryptocurrency payments off of your shoulders.
4. Staking Rewards Statements
With Ethereum becoming a proof-of-stake platform, many individuals have begun staking cryptocurrency, adding another layer to the cryptocurrency tax conundrum. Like with capital gains, rewards from staking (as well as from exchange platforms) are taxed by most governments around the world. So how do you track these?
Most CEFI exchanges like Binance, Coinbase, and Kraken will provide you with tax documents come tax time. However, if you are using a decentralized exchange like Sushiswap, Uniswap, or Pancakeswap, you are on your own.
In these cases, we recommend searching for something similar to a transaction document, if it is offered, which may record all of the amounts you’ve received over the years. If this isn’t available, we recommend checking in on a quarterly basis, noting what you’ve made that year, and putting that number in a spreadsheet. While this doesn’t make it any easier, it does break up the work so you aren’t spending hours trying to file your taxes.
Do I Need to File Taxes When Only Holding Cryptocurrency?
In general, you do not need to mention anything on your taxes on the years you are just holding cryptocurrency. Of course, you should always double check with your local laws, but when researching this article, reporting holdings only was not required in the US, Australia, UK, and most EU countries.
What is the Best Way to Track Crypto For Taxes?
As you can see, tax time is extremely complicated for those of us who are crypto holders and users, especially if you use DEFI methods (which we recommend).
Honestly, there is no easy way to track all of your crypto activity, especially if you are a day trader or frequent spender. Our best suggestion is to make quarterly check-ins with your portfolio and use these times to document your activity. This way, the work is broken into four pieces, instead of needing to do it all at once. An alternative would be to schedule a day or two off around tax season to gather all of this information, but even then, a day or two may not be enough.
Although there are tracking programs out there, we do not recommend using them for security reasons. It’s not fun, but you really need to do all of the tracking on your crypto portfolio on your own.
