As the 2026 session approaches, many U.S. cryptocurrency traders risk making avoidable mistakes that can lead to IRS notices, incorrect filing, or paying more than necessary.
Let’s look at the top 5 crypto tax mistakes and how the CRPTM helps you avoid them easily helps you avoid them easily.
Let’s look at the top 5 crypto tax mistakes and how CRPTM helps you avoid them easily.
1. Missing Wallet or Exchange Data: One of the biggest issues is missing wallet or exchange data, which happens when people move assets across multiple platforms and forget to include older wallets, cold storage, or DeFi addresses.
For example, if you bought ETH in the year 2021 on an old exchange, transferred it twice, and only recorded the final sale, the IRS sees proceeds with no cost basis, meaning you are taxed on the full amount.
How CRPTM Helps?
Tools like CRPTM’s Crypto Tax software in the U.S.A solved this instantly by automatically importing and matching data with 180 + wallets and their exchanges, ensuring your history is complete.
CRPTM also functions as a crypto portfolio tracker, showing you every asset, transaction, and transfer in one place, so nothing slips through the cracks. CRPTM also functions as a crypto portfolio tracker in U.S.A, showing you every asset, transaction, and transfer in one place, so nothing slips through the cracks.
2. Reporting the Wrong Cost Basis: Another common mistake is reporting the wrong cost basis, especially if you have traded frequently, used multiple wallets or interacted with DeFi protocols.
Why does this happen?
If you can’t match properly, the cost basis may be recorded as zero, a costly error that can inflate your taxable gains. This is also common with NFTs and liquidity pool tokens, where traders forget that gas fees, minting costs, or LP contributions count towards the cost basis.
For example, Selling an NFT for $2,000 might look like a big gain, but if minting and gas cost $1,400, your real gain is only $600.
CRPTM’s Solution- CRPTM’s Crypto Tax software in the U.S.A calculates cost basis automatically using IRS approved method, saving you from guesswork and incorrect entries. And because CRPTM Doubles as an intelligent cryptocurrency portfolio tracker in U.S.A, you can easily view acquisition dates, fees, and adjusted cost basis without digging through old spreadsheets or history.
3. Ignoring DeFi, Staking, Airdrop, and NFT Income: The final mistake many traders make is ignoring DeFi, staking, airdrop, and NFT income. These are taxable the moment you receive them, not only the value sold.
For example, Staking ADA worth $200 is treated as income that must be reported, even if the token later drops in value.
Many traders also forget that yield farming rewards, wrapped tokens, NFT Royalties, and incentive tokens are considered ordinary income. When these aren’t reported, they create mismatches between what the blockchain shows and what the tax return includes.
4. Failing to Categorize Income Correctly: Incorrect categorising of Crypto income is another major issue. If you list staking rewards or
airdrops as capital gains instead of ordinary income, you risk misreporting.
CRPTM Simplifies by automatically identifying income transactions and categorising them correctly. This ensures each entry is IRS-compliant and easy to track at tax time.
5. Skipping Automated Reporting Tools: Many traders still rely on manual calculation or Messy spreadsheets, increasing the risk of errors. In 2026, with stricter IRS oversight, automation is no longer optional.
With complete transaction matching, accurate income classification, and ready to file File 8949 and Schedule D reports, CRPTM ensures you stay fully compliant and avoid all major crypto tax traps before the 2026 deadline.
Avoiding these five common crypto tax mistakes can save you hours of correction work and potential penalties. With CRPTM’s Crypto Tax software in the U.S.A and crypto portfolio tracker in U.S.A, you can simplify every step from importing data to calculating cost basis to categorising income and generating tax-ready reports. Stay ahead of the IRS’s tightening crypto rules and make the 2026 tax season smoother, faster, and error-free.
