PayPal launches free tax reporting service; U.S. users must report crypto earnings in 2025

LiquidatedAgain · 2026-02-17T01:23:51+00:00

PayPal recently announced that users holding a Debit Mastercard will be offered free joint state and federal tax filing services for the year 2025. This policy aims to facilitate users in fulfilling their tax obligations, especially when it comes to cryptocurrency transactions, where users will receive the IRS-mandated 1099-DA form. Therefore, users should keep the relevant documents safe and complete their filings before the tax deadline.

LiquidatedAgain

2026-02-17 01:23:51

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PayPal Official Recently Announced Important Policy Update, Offering Free Tax Filing Services for Debit Card Users, Including Federal and State Tax Return Submissions. This new measure aims to help users more conveniently fulfill their tax obligations, especially as digital asset trading becomes increasingly common.

Federal and State Tax Filing Made Easy

To ease the burden on users, PayPal announced that it will provide free federal and state tax return filing services for PayPal Debit Mastercard holders for the 2025 tax year. This means users can access official tax filing channels without additional costs. This free tax filing service is a significant convenience for U.S. users engaging in various transactions through PayPal.

Cryptocurrency Transactions Must Be Reported to the IRS

According to the latest information on PayPal’s official website, starting from the 2025 tax year, the U.S. Internal Revenue Service (IRS) explicitly requires digital asset brokers like PayPal to issue 1099-DA forms to their users. These forms report digital asset dispositions, especially gains from buying and selling cryptocurrencies.

Specifically, if you sell or exchange cryptocurrencies through your PayPal wallet during the 2025 tax year, PayPal will mail you the corresponding 1099-DA form by February 15. This is not just a paper document; it signifies the IRS’s formal recognition and regulation of digital asset transactions.

Information Users Need to Prepare

For U.S. users holding a PayPal wallet, understanding this policy is crucial. During the 2025 tax year, any disposition involving cryptocurrencies—whether selling or exchanging—will be subject to IRS regulation. Users should:

Keep the 1099-DA forms sent by PayPal safe
Prepare relevant transaction records and cost basis data
Complete their tax filings before the deadline

PayPal’s free tax filing service is designed to help users smoothly complete this process. Through official channels, users can report their crypto asset transactions more accurately and securely.

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