April 15, 2025, marks the tax deadline in the United States. Washington is also preparing major tax and cryptocurrency reforms. That means anyone who traded, sold, or received cryptocurrency in 2024 must file their records.
With time running out, many crypto users are still organizing their files and getting ready to pay for any liabilities. The complexity of taxes and regulations around crypto does not make the task easier.
Michael Brennan, Director of Tax Services and Head of the New York City office at CPA and advisory firm Berkowitz Pollack Brant, discussed with CCN common crypto investor mistakes, tax-saving strategies, the proposed 0% capital gains tax, and broader issues influencing digital asset taxation in the United States.
#1 Crypto Tax Mistake That Triggers IRS Attention
He opens with a strong statement: “The biggest mistake is not including crypto assets on a tax return at all”.
Brennan explained that the IRS has ramped up enforcement in recent years. Failing to report crypto transactions is an oversight and a red flag.
Brennan warned investors against missing one of crypto’s unique advantages: the wash sale loophole.
Since crypto is not classified as a security, like stock or bonds, under current IRS rules, crypto investors can sell tokens at a loss, buy them back immediately, and still claim the loss on their taxes.
Many investors overlook this strategy, either because they’re unaware it exists or they mistakenly assume the same rules that govern equities apply to crypto”, Brennan says.
He recommends identifying unrealized losses before April 15 and using them to offset taxable gains, especially for high-volume traders.
“Investors should look for assets trading at a loss and reinvest immediately to stay in the market. This technique works regardless of income level and may become more valuable during market downturns”, he states.
0% Capital Gains Tax on Crypto in 2025? What Investors Should Know Now
The 0% capital gains tax on crypto is a rumor that has yet to materialize, but taxpayers can start planning ahead. Brennan explained that “with no official confirmation on the 0% capital gains tax, taxpayers should proceed carefully.”
Brennan said investors might want to wait before realizing large gains in 2025, in case the law kicks in by April 2026. He also recommended preparing early by exploring tax-efficient options like trusts or legal entities ahead of time.
“Keeping appreciated assets on the books could put them in a better position if the policy kicks in next year.”
Crypto Tax Tips for Non-Resident Investors: Avoid Common Reporting Errors
Crypto tax compliance gets even more complex for non-domiciled individuals under U.S. law. Brennan explained that their biggest challenge is “figuring out how to properly source and classify their crypto income.”
Since there are no standardized IRS forms for reporting staking rewards or decentralized finance (DeFi) yields, non-resident investors must determine whether their income is U.S.-sourced, a key detail that influences whether they owe U.S. tax.
“This combination of unclear classification and sourcing rules makes it easy to get wrong.”
He advised keeping detailed records and working with professionals understanding digital assets and international tax law.
Long-Term Crypto Tax Strategies to Prepare for a Leaner 2026
Brennan recommends adopting long-term planning strategies if recession pressures rise due to the new tax policy failing to pass tariffs and the 0% capital gains.
“Investors can still shift their focus to long-term strategies. That starts with revisiting portfolios to identify assets that could be sold at a loss and reinvested, reducing future tax exposure,” Brennan explains.
Brennan added that crypto can sometimes outperform traditional assets in a recession, making it crucial to stay disciplined about tax planning.
Crypto Income Strategies for a High-Inflation, High-Tariff Economy
With costs rising due to tariffs, Brennan encourages crypto holders to think beyond just staking or mining.
“Investors can diversify income streams by mixing staking and mining with yield farming or lending on DeFi platforms.”
He said more capital is flowing into stablecoins and tokenized real-world assets (RWAs) to avoid crypto price swings. While interest from DeFi lending is taxable, it can still beat rising costs if investors make smart moves.
He emphasized that tracking is essential in bringing different benefits. “For miners, this supports deductions; for stakers, it clarifies the cost basis for capital gains when selling rewards”, he states.
He concludes by emphasizing his clear advice: “Always track costs, tariffs could inflate everything from hardware to electricity—keep detailed records of every expense”.
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