Navigating Crypto Taxes with Ulys: What the New IRS Rules Mean for You

Taxes and cryptocurrency can feel like a complicated mix. But with the right information, and a little support, you can handle tax season with less stress. The Internal Revenue Service (IRS) is rolling out new rules for reporting digital asset transactions, and while these changes primarily target crypto exchanges, they matter for everyone who buys, sells, or trades cryptocurrency in the U.S.

If you use Ulys, a non-custodial crypto wallet, your experience will be a bit different from those who rely on exchanges. Let’s look at what’s changing, what it means for you, and how you can stay organized when it comes to tax time.

What’s New with Crypto Taxes?

Let’s clear something up: In the U.S., you’ve always needed to report your cryptocurrency activity. Income and capital gains count, even if they happen outside of a traditional bank.

Starting with the 2025 tax year, new IRS rules require crypto exchanges and brokers to send details about digital asset transactions to the IRS using a standard form called Form 1099-DA. For now, these requirements apply to platforms that act as intermediaries. Think exchanges where you buy, sell, or trade tokens. Since Ulys is a non-custodial wallet (meaning you control your assets directly), we don’t facilitate trades as an intermediary. So you won’t be getting a Form 1099-DA from us.

But here’s where it gets important: You’re still responsible for tracking and reporting your own crypto transactions, regardless of where or how you trade.

What is Form 1099-DA and Does It Apply to You?

Form 1099-DA is the new IRS form for digital asset transactions. If you use an exchange, you’ll likely receive this form starting with your 2025 tax filings. It will include details about your gross proceeds and, later on, your cost basis.

With Ulys, you’re in the driver’s seat. We don’t report your transactions to the IRS, but U.S. taxpayers are still required to report any gains, losses, or income from cryptocurrency activity, even when using non-custodial wallets.

If you use both an exchange and Ulys, you’ll need to keep careful records that cover all platforms, not just the ones that send you tax forms.

Why Tracking Your Own Transactions Matters

The responsibility for your tax reporting doesn’t go away just because you’re using a non-custodial wallet. Here’s why keeping solid records is so important:

• Cost basis: This is what you paid for a token, including any fees.

• Gross proceeds: This is the amount you received from selling or exchanging tokens.

• Timing: You’ll need to know when each transaction occurred to calculate gains or losses.

With Ulys, you have control over your assets, and your reporting. Making a habit of tracking your buys, sells, swaps, and transfers will save you stress at tax time. With Ulys, these are all tracked in your transaction history in-app.

Staying Compliant: Your Key Steps

The IRS isn’t just looking at exchanges. Every taxpayer is responsible for reporting their cryptocurrency activity. Here’s how you can keep things simple:

1. Keep Organized Records

Make a note each time you buy, sell, or exchange a digital asset. Record the date, the amount, the asset involved, and its value at the time of the transaction. Ulys gives you full visibility into your wallet activity. Make it a habit to review this regularly, especially around tax season.

2. Understand Your Responsibilities

Even if you never use an exchange after moving to Ulys, you are still required to report capital gains and losses, as well as any earning opportunities (like staking or rewards) on your tax return. Keep an eye on any activity that could affect your tax bill.

3. Consult with a Tax Professional

Tax rules can be tricky, and penalties for mistakes are real. If you’re unsure how to track a specific transaction or need help pulling together your records, consider talking to an accountant or tax advisor who understands cryptocurrency.

What About Backup Withholding and Verification?

The IRS requires exchanges to confirm users’ tax status. If not confirmed, exchanges must withhold a portion of proceeds as backup withholding. Since Ulys isn’t an exchange, this doesn’t apply to your wallet directly. But if you continue to use exchanges, make sure your information is accurate and up to date to prevent any surprises.

Ulys: Here to Make Things Easier

Crypto taxes can seem daunting, but you’re not on your own. We’re here to help you understand how to stay compliant and informed so you can focus on making the most of your digital assets. As the IRS makes changes to crypto tax rules, we’ll keep you updated with straightforward tips designed for wallet holders just like you.

Looking for ways to streamline your tax prep? Make a calendar reminder to download your wallet history, and consider tools or services that can help organize your transactions throughout the year.

You control your wallet. You control your tax fate, too. We’re here to help you take each step with confidence.