As the 2024 tax year wraps up, crypto traders should prepare for tax filing season. It's essential to gather accurate trading records since many exchanges, especially non-U.S. ones, do not provide IRS Form 1099, leading traders to track their cost basis independently. Starting from 2025, traders are required to use specific tax lot relief methods for reporting, necessitating possible wallet consolidation. Additionally, any crypto gains, including those from airdrops or services, must be reported as income at the fair market value at the time received. Tax-loss harvesting remains an option to offset taxable gains, and individuals can still contribute to their IRAs to reduce tax liability for 2024 if they have not done so already. Notably, even holding ETFs tied to crypto can create a tax obligation due to their structure. Thus, thorough preparation and keeping detailed records is crucial for tax compliance.

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