Cryptocurrencies are generally taxed in two ways, capital gains/losses and ordinary income.

This article walks through different options for reporting ordinary income earned through interest, staking, mining, airdrops and other income events.

According to IRS guidelines, crypto investors are required to report the USD value of each income distribution based on the time that it was received.. To find out whether you have taxable income to report, navigate to your Tax Reports page within CoinLedger. From here you can view your Total Income amount for the year at the top of the page. The Total Income amount is the calculated fiat value of all income events imported into CoinLedger for that tax year.

Directly below you will see your Taxable Income summary where it displays your separate totals for each income type.

Crypto income does not always fall into one simple tax category. This means that the crypto you receive from mining, staking, interest accounts, or work compensation gets reported on different tax forms, depending on your specific situation.

For this reason, when reporting crypto income you will need you will need to carefully review your specific income transaction types to determine which tax forms you will use.

You can report most crypto income on Schedule 1 as Other income. (Not subject to self-employment tax) This includes income from airdrops, forks, and other hobby income. Schedule 1 is typically used for miscellaneous income that doesn’t have a better spot elsewhere on the tax return. If you have multiple different types of crypto income, it may be best to separate out the categories and provide as much information as possible. 

Example of Schedule 1

If you earned staking income or interest rewards from lending out your crypto, it’s generally reported on Schedule B.
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If you earned crypto while operating a business, like receiving payments for contract work, running a cryptocurrency mining operation, or operating a node, this is often treated as self-employment income and is reported on Schedule C. Schedule C also allows you to calculate and deduct business expenses such as electricity used for mining to offset your business income. Your net income from Schedule C activity is taxed as ordinary income and is also subject to self-employment tax.

This guide is not intended to be used as official tax advice with regards to which tax form you should choose to report your crypto income. If you are at all unsure which form to use, it's recommended that you consult with a tax professional. To get help with this, visit our CoinLedger Accountant Directory to connect with a recommended crypto tax professional near you.

CoinLedger does not export the completed Schedule 1 file or any other income filing documents. This is by design because there are many other line items in the Schedule 1 that you or your tax professional will need to complete. For your privacy and data security CoinLedger does not collect personal data that pertains to the items listed under Additional Income on the Schedule 1.

From the Tax Reports page you can export the Income Report CSV which lists each income distribution in detail.

The Income Report is not a filing document itself, but rather a supplementary file that can be used to complete your relevant ordinary income tax forms like Schedule 1, Schedule B, and Schedule C. You can save this file for your records or send it to your tax professional for their review.

The Income Report provides more details on how your income calculations were derived including:

If you have any questions about reporting your crypto income please send a message to our support team. :)