How to Prepare for Crypto Taxes Before Year-End: Form 1099-DA, Records and Tools Worth Owning

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With less than three months left in 2026, now is the best time to get your crypto tax records in order, not next April. This is also the first year that U.S. brokers begin reporting cost basis on Form 1099-DA for certain digital asset sales, which makes good personal record-keeping more important, not less. This guide walks through what to do before December 31 and the tools that make the job easier.

Why 2026 is different: Form 1099-DA and cost basis

Under IRS rules, custodial brokers such as centralized exchanges began issuing Form 1099-DA for digital asset sales. For transactions in 2026, brokers start reporting cost basis, but only for so-called covered assets: generally, assets you acquired on or after January 1, 2026 and held continuously in the same broker account until you sold them.

That leaves big gaps. Coins you bought before 2026, coins you moved in from a hardware wallet or another exchange, and anything you did on-chain in DeFi may show proceeds without reliable basis. If you do not have your own records, you could end up reporting a larger gain than you actually had. The fix is simple but tedious: keep your own complete transaction history.

Step 1: Export every transaction history now

Log in to every exchange you used this year, including any you have stopped using, and download full CSV transaction histories. Exchanges change, merge and shut down, and access to old data is not guaranteed. Do the same for wallet addresses by noting them in a secure document so tax software can import on-chain activity.

Store these exports somewhere safe and redundant. An encrypted USB drive is a good offline backup option. Hardware-encrypted drives such as the Apricorn Aegis Secure Key 3NX or the Kingston IronKey Keypad 200 use an on-device PIN pad, so the data stays protected even if the drive is lost. Never store seed phrases on these drives; they are for records, not keys.

Step 2: Pick your tax software

Most people with more than a handful of trades use a dedicated crypto tax tool such as Koinly, CoinTracker, CoinLedger or TokenTax to import exchange and wallet data, match transfers between your own accounts and calculate gains. These tools typically produce a Form 8949-ready report that you can feed into mainstream tax software.

For the return itself, the desktop editions of the big tax packages handle investment income, including digital assets:

• TurboTax Premier (Desktop) is aimed at filers with investment and rental income and supports importing crypto gain and loss reports.
• H&R Block Tax Software Premium is a lower-cost alternative that also covers investment income.

Buying the desktop version early also lets you work through a draft return as soon as forms become available, rather than rushing in April.

Step 3: Review gains and losses before year-end

Once your data is imported, look at your realized and unrealized positions. Many holders review whether selling assets at a loss before December 31 could offset gains realized earlier in the year, a strategy known as tax-loss harvesting. Under current U.S. law, the wash sale rule in Section 1091 applies to securities such as stocks and ETFs, and is generally understood not to apply to cryptocurrency held directly. Note that crypto ETFs are securities, so the rule does apply to them. Tax law can change and individual situations vary, so confirm your plan with a qualified tax professional before acting.

Markets have been volatile lately, as we noted in our coverage of Bitcoin’s recent slide and liquidations, which is exactly why reviewing positions with real numbers in front of you beats guessing.

Step 4: Digitize your paper trail

Receipts for mining hardware, records of business expenses, and any paper statements are easier to manage once scanned. A compact document scanner such as the Fujitsu ScanSnap iX1600 or the Brother ADS-1800W can turn a shoebox of paperwork into searchable PDFs in an afternoon. If you scan sensitive documents, keep the files on an encrypted drive or a dedicated crypto computer rather than a shared family laptop.

Originals you need to keep can go in a fire-resistant document box like the SentrySafe Fireproof and Waterproof File Box. For a deeper look at storage options, see our guide to the best fireproof safes for crypto backups.

Step 5: Learn the basics

You do not need to become a tax expert, but understanding how capital gains, cost basis and holding periods work will help you spot errors in software output. Taxes Made Simple by Mike Piper is a short, plain-English primer on how U.S. income taxes work, and it is a useful companion to crypto-specific resources.

A year-end checklist

• Download full transaction histories from every exchange you used in 2026.
• List every wallet address you control.
• Import everything into a crypto tax tool and fix unmatched transfers.
• Review realized gains and consider, with professional advice, whether any year-end moves make sense.
• Back up records to an encrypted drive and keep paper originals in a fire-resistant box.
• When your 1099-DA arrives, compare it against your own records rather than assuming it is complete.

An hour or two spent now can save a lot of stress and money in April.

This article is for informational purposes only and does not constitute financial or tax advice. Consult a qualified tax professional about your specific situation.