Crypto Gains – Attachments to Form 8949
Written by David Canedo, CPA
May 10, 2023
US taxpayers are required to report every individual trade on their tax return's form 8949. However, it is common for crypto traders to have thousands or even millions of trades per year. This is why the Internal Revenue Service (IRS) allows taxpayers to report a summarized transaction on their tax return. If you choose this option, you must send the full detailed statement. Here is how to generate the attachment with Accointing.
Last Updated: May 10, 2023
Why an Attachment is Needed
US taxpayers are required to report every individual trade on their tax return’s form 8949. However, it is common for crypto traders to have thousands or even millions of trades per year. This is why the Internal Revenue Service (IRS) allows taxpayers to report a summarized transaction on their tax return and instead send a statement containing the full detailed information. This way taxpayers can simply type one line for their short-term gains and one line for their long-term gains when preparing their tax return as opposed to spending hours entering each trade.
If you do choose to report summarized transactions, sending the full detailed statement is a requirement.
Generating the Attachment
Due to the volume of crypto transactions, the Accointing pdf Form 8949 provides summarized transactions, so this file should not be used as it does not contain all the detailed information.
Download your Tax Report, select ‘I file with my CPA’ and find the csv files labeled “Form8949-Short-Term-Disposals” and “Form8949-Long-Term-Disposals”. Open the files and make sure that all columns are clearly visible, verify that the totals match your reported totals, and print both, the short-term and the long-term report to pdf or to paper depending on the format that you need.
Sending the Attachment
Including an Electronic Filing Attachment to your Tax Return
Some tax tools allow users to upload pdf attachments to file electronically; if the tax tool you are using allows for this, upload the pdf files generated above as your attachment when prompted to upload attachments.
Depending on the tool you are using, you may need to enter some basic information about the attachment, search for something such as “Form 8949 Exception Statement”
Once the file is uploaded, your software will confirm if it was attached, and if successful, it will be electronically filed when you e-file your tax return.
Submitting via Mail and Form 8453
If the tax tool you are using does not allow for electronic attachments, you will have to mail-in your attachment along with Form 8453 to the IRS within 3 business days after receiving acknowledgement that the IRS has accepted the electronically transmitted tax return.
Enter all your personal information at the top of the form, including your name, last name and social security number, your spouse’s name, last name and social security number (if filing jointly) as well as your home address. Check the last box on Form 8453 that reads “Form 8949, Sales and Other Dispositions of Capital Assets (or a statement with the same information), if you elect not to report your transactions electronically on Form 8949”
As indicated in the instructions, you should not sign the form. Add your paper attachment in the envelope and mail Form 8453 and your attachments to:
Internal Revenue Service
Attn: Shipping and Receiving, 0254
Receipt and Control Branch
Austin, TX 73344-0254
The information contained in this guide, including any supplemental materials, is for general information purposes and does not constitute financial, investment, legal or tax advice. The present content is not intended as a thorough, in-depth analysis, nor a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. Please consult your tax advisor.