Tax Forms FAQ for eToro USA

What is a Form W9?

The IRS Form W-9, Request for Taxpayer Identification Number and Certification, is used to get the necessary information required from you in order to report payments to the Internal Revenue Service (IRS). 

 

Why do I need to complete a Form W9?

eToro USA uses your name, address, and Social Security number or tax identification number provided on Form W-9 to complete IRS mandated forms such as a 1099-K.

 

How do I determine if I will be receiving a Form 1099-K?

We will only send you a 1099-K form if you  generally meet BOTH of the following conditions:

  • You have made more than 200 crypto to USD trades (“Closed positions during the previous calendar year; 
  • AND your total proceeds from all your sales of crypto to USD exceed $20,000 during the previous calendar year. 

However, the above rule varies if you reside in certain US states. In those states, we will send you a 1099-K form if:

  • You have closed any number of positions during the calendar year, but whose total proceeds value is equal to or greater than the following dollar amounts if you are a resident of the following states:

State

Total proceeds equal or exceed

Arkansas

$2,500

District of Columbia 

$600

Illinois

$1,000

Maryland

$600

Massachusetts 

$600

Mississippi 

$600 

Missouri

$1,200

New Jersey

$1,000

Vermont

$600

Virginia

$600 

 

How will I receive a Form 1099-K?

Per above, if we are required to send you a 1099-K, you will receive a physical copy by mail, sent to the mailing address listed in your account. 

 

What do I do with my 1099-K?

The 1099-K shows all of the transactions that passed through your account in a given calendar year. What you can do next:

  1. Understand your trading activity by looking at your transaction history, which can be found by following these steps here.
  2. Calculate gains and losses for eToro USA transactions by consulting a tax expert.
  3. Consult a tax expert, regarding how this should be reported in your tax returns. 

 

What information is in the 1099-K form?

We are required to report gross proceeds from all your crypto to USD sales executed on the eToro USA platform when applicable reporting thresholds are met.

 

What information is NOT included within Form 1099-K?

Form 1099-K is informational and does not show gains or losses or cost basis.

Form 1099-K is NOT the same as Form 1099-B, which shows gains or losses from broker transactions). eToro USA is not required to issue Forms 1099-B because the cryptocurrencies offered are regarded as sales of personal property under current IRS guidance.

Form 1099-K relates to trading activity on the eToro USA platform and does NOT represent any income from staking, friend referral, or other promotional incentives that are taxed as miscellaneous income. If you receive $600 or more in miscellaneous income amounts during the calendar year, you will alsos receive a 1099-MISC for those payments made by eToro USA into your online account.

 

Where can I find more information about Form 1099-K?

You may read more on this IRS Instructions for Form 1099-K website. The “Specific Instructions” on Page 1 provide valuable context with respect to eToro’s Form 1099-K reporting obligations.

We also kindly suggest that you consult with your tax advisor if you have questions about your individual tax obligations derived from your activity conducted on the eToro USA platform.

 

Where can I find more information about Form 1099-MISC?

You may read more on this IRS Instructions for Form 1099-MISC website. The “Specific Instructions” on Page 1 provide valuable context with respect to eToro’s Form 1099-K reporting obligations.

We also kindly suggest that you consult with your tax advisor if you have questions about your individual tax obligations derived from your activity conducted on the eToro USA platform.

 

I misplaced my eToro-issued Form 1099-K and/or Form 1099-MISC; can eToro USA send another copy?

Yes! We are happy to resend you the Form 1099-K and/or Form 1099-MISC. Please submit a request through our contact form here. When searching through your mail, please recall that the original Form is delivered from a third-party provider, and not from eToro USA directly.

 


Legal disclaimer: eToro USA takes the position that it is a Third Party Settlement Organization under Section 6050W of the Internal Revenue Code for certain transactions, and accordingly must file IRS Forms 1099-K for transactions settled on its platform. Therefore, we will be filing a Form 1099-K with the IRS and in some cases, with certain State authorities, reporting transactions by eToro USA customers each year where we are required. We will send you a copy of the IRS Form 1099-K using a third party vendor. This material has been prepared for general informational purposes only. . The information contained herein is not intended to provide, and should not be relied on for, tax advice. eToro USA does not offer tax advice, please consult with a tax-planning professional regarding your personal tax circumstances.