New IRS 1099-DA Rules: Prepare NOW for the 2025 Crypto Tax Changes!

Key Takeaways 

• Starting in 2025, the IRS will require FIFO cost basis reporting on a by-account basis—eliminating multi-wallet HIFO methods commonly used by crypto traders.

• This change could significantly increase your reported taxable gains unless you prepare your positions in advance.

• CryptoTaxAudit’s Safe Harbor Allocation Plan offers a clean slate—allowing you to summarize current open cost basis and avoid IRS recalculations from earlier years.

• Signing up now can protect you from audit risk and retroactive FIFO enforcement, and it’s free to enroll through CryptoTaxAudit.

There’s a lot of buzz around the IRS’s new 1099-DA regulations, and for good reason. 

These changes are going to impact how crypto traders calculate their gains starting in 2025, and if you don’t prepare now, you could face some major headaches.

How Are the IRS 1099-DA Rules Changing in 2025?

In the past, most crypto traders have used various methods to calculate gains—Highest In, First Out (HIFO) being one of the most popular. 

Some tax services give it cute names like "minimization" or "optimization," but it’s essentially HIFO across your entire wallet or even across multiple wallets.

But that’s about to change. Starting January 1st, 2025, for the 2025 tax year, the IRS is limiting traders to First In, First Out (FIFO) on a by-account basis. 

That means you can no longer use multi-wallet or universal approaches. 

This shift to FIFO on each account separately is a big deal and can seriously change how you report your crypto gains—potentially leading to higher taxable income.

What Do These Crypto Tax Changes Mean for You?

This is a radical shift in how you’ll need to handle your crypto tax calculations, and if you’re not careful, it could cause a lot of pain when tax time comes. 

But there’s a way to protect yourself and avoid the confusion: our Safe Harbor Allocation Plan.

How Can the Safe Harbor Plan Help You in 2025?

The Safe Harbor Plan offers you a fresh start for 2025 and beyond. 

Instead of combing through years of complicated transaction histories, you’ll summarize your existing open cost basis positions and start fresh with that. 

No more digging through old records from 2024 and earlier—just a clean slate for gain calculations going forward.

And here's why this is so important: if the IRS audits you for any previous years (before 2025), they’ll use FIFO on a by-account basis. 

By signing up for the Safe Harbor Plan, you protect yourself from the IRS using this more aggressive recalculation method against you. 

It’s a simple way to avoid potential penalties and extra taxes.

Why Should You Prepare Before the 2025 Crypto Tax Rules Take Effect?

The IRS changes are coming whether you’re ready or not, but the Safe Harbor Plan can help ensure your preparation. 

By signing up, you shield yourself from IRS recalculations that could cost you big. It’s free, it’s simple, and it’s going to save you from a lot of potential headaches.

How to Sign Up for CryptoTaxAudit’s Safe Harbor Plan

Signing up for the Safe Harbor Plan is quick and easy. 

Head over to CryptoTaxAudit.com/1099 to get started.

 Once you’re on the list, we’ll keep you updated with all the information you need to stay compliant and get the best advantage for your crypto tax situation. 

If you have any questions, feel free to contact us directly at CryptoTaxAudit.com, and we’ll help you navigate these changes.

Don’t wait—get ahead of the 2025 tax changes today. Your future self will thank you.

Related reading: Massive Changes in IRS Crypto Tax Regulations: What You Need to Know

Frequently Asked Questions

Q1: What are the new 1099-DA rules from the IRS in 2025?
A: Starting January 1st, 2025, the IRS will require FIFO (First In, First Out) cost basis reporting on a per-account basis for crypto traders. CryptoTaxAudit helps clients prepare for this shift and avoid costly misreporting.

Q2: Can I still use HIFO or universal wallet methods for 2025 taxes?
A: No. The IRS will no longer allow multi-wallet or HIFO approaches. CryptoTaxAudit can help you transition to the new FIFO rules while minimizing the impact on your gains.

Q3: How does CryptoTaxAudit’s Safe Harbor Allocation Plan work?
A: The Safe Harbor Plan summarizes your current open cost basis positions and gives you a clean slate for 2025. It protects you from retroactive IRS recalculations and simplifies reporting.

Q4: Why should I act now instead of waiting until 2025?
A: The sooner you prepare, the better. Signing up early helps CryptoTaxAudit protect you from future audits and retroactive tax penalties under the new rules.