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Have you traded cryptocurrency on Binance or Binance.US?
In this guide, we’ll cover everything you need to know about both company’s tax reporting policies. We’ll also break down a simple way to report your Binance taxes in minutes.
Do I have to pay taxes on my Binance transactions?
Cryptocurrency is classified as property by the IRS. As a result, your cryptocurrency activity on Binance and other platforms is subject to capital gains and ordinary income tax.
Capital gains tax: If you dispose of your crypto-assets, you’ll incur capital gains tax. Examples include selling your cryptocurrency for fiat or trading it for other cryptocurrencies.
Ordinary income tax: If you earn cryptocurrency, you’ll recognize ordinary income. Examples include earning referral or interest rewards.
For more information, check out our complete guide to cryptocurrency taxes.
Does Binance report to the IRS?
At this time, Binance.com is not operating within the United States and as a result, Binance.com does not report to the IRS. American cryptocurrency users that want to access Binance can instead use Binance’s partner company, Binance.US.
Does Binance.US report to the IRS?
When a customer earns more than $600 through staking, referrals, and other income-generating activities, Binance.US issues a Form 1099-MISC and files an identical copy with the IRS.
This form provides information about ‘miscellaneous income’ and does not include information about capital gains and losses from disposals, which is needed to accurately report your taxes.
In the future, it’s likely that Binance.US and other major exchanges will be required to report all customers’ capital gains and losses to the IRS due to the passage of the American infrastructure bill. This Form 1099-B that Binance.US uses to report to the IRS in the future will contain detailed information about all cryptocurrency disposals on the platform.
What does the IRS do with the information Binance.US provides?
In the past, the IRS has used information from 1099 forms to send warning letters to crypto investors. It’s reasonable to assume that large discrepancies between your tax return and your 1099 form will increase your risk of a cryptocurrency tax audit.
How do I report my Binance.US taxes?
Looking to report your Binance taxes? Cryptocurrency tax software like CoinLedger can help.
CoinLedger integrates with Binance.US and dozens of other cryptocurrency exchanges. Once you’ve uploaded your transactions, you’ll be able to generate a comprehensive tax report with the click of a button.
Frequently asked questions
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Written by:
Miles Brooks
Director of Tax Strategy
Miles Brooks holds his Master's of Tax, is a Certified Public Accountant, and is the Director of Tax Strategy at CoinLedger.
About the Author
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CoinLedger has strict sourcing guidelines for our content. Our content is based on direct interviews with tax experts, guidance from tax agencies, and articles from reputable news outlets.
