Robinhood has added crypto wallets to its platform so that users can spend and trade their coins, whether it be Bitcoin or altcoins like Ethereum. One of the advantages Robinhood holds over other centralized exchanges like Binance and Gemini, is that it does not charge fees. This is likely because Robinhood is not a traditional crypto company - it made its name trading stocks. Up until 2022, you couldn't move your crypto on or off the Robinhood crypto exchange - however, Robinhood is now rolling out this option for users. Whatever your investments - doing your Robinhood crypto taxes with Koinly is easy.
Yes. Robinhood reports crypto to the IRS.
Anytime you're issued with a 1099-B (or any 1099 form), the IRS gets a copy too. Any user who sells crypto on the Robinhood platform will be issued a 1099-B form and the IRS will get the same form. This is why it's so important to report your crypto taxes accurately. You may receive more than one 1099 form from Robinhood if you're investing in properties other than crypto, like Robinhood securities. You'll be able to see any 1099 forms Robinhood has issued you in the tax documents section within your account.
You need to report any gains, losses or income from your Robinhood crypto investments to the IRS as part of your annual tax return, before the April deadline. You'll report crypto gains and losses using Form 8949 & Schedule D, and additional income from crypto in Schedule 1 or Schedule C depending on your employment status. You may also use your Robinhood 1099-B form to report your crypto to the IRS, provided it is accurate.
Let's dive in...
Robinhood works differently than most crypto exchanges - so you've got a couple of options for reporting your Robinhood taxes to the IRS:
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If you're going to receive a 1099 form from Robinhood, these will be issued in mid-February for the preceding tax year. You can find them in the tax documents section of your Robinhood account.
Yes. Robinhood Crypto provides users who sold crypto with a Consolidated Form 1099-B. This tax report includes all your disposals of crypto within the Robinhood platform. You can find this under Tax Documents within your Robinhood account.
Yes. You can download financial statements from your Robinhood account. Just log in to your account and select the account icon in the bottom right corner, then statements and history, then account statements. You can then generate monthly financial statements. Alternatively, head to the tax documents page to download an annual tax form. 1099 forms are generally available from January to February.
The IRS don't look kindly on tax evaders - you'll face both fines and potentially jail time. Plus, the IRS already knows about your Robinhood transactions as they'll receive a copy of your 1099 form from Robinhood.
Yes. Robinhood issues users with a variety of tax forms depending on their investments on the platform.
Yes. You need to report any gains, losses or income from your Robinhood investments as part of your annual tax return with the IRS by April 18.
Robinhood has not released proof of reserves yet. In the wake of other major American-based crypto exchanges like FTX US collapsing, this may well change soon.
Depending on your investments on Robinhood, you may receive:
- Form 1099-R
- Consolidated 1099-B
- Form 480.6
- Form 1042-S
- Form 5498