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 clients in order to report payments to the Internal Revenue Service (IRS). 

 

Why do I need to complete a Form W9?

eToro USA uses the 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.

 

Can I refuse to provide a W9?

You can refuse to provide a W9; however, you will be subject to a 24% withholding on payments known as “backup withholding.” Payments that may be subject to backup withholding include, but are not limited to interest and promotional offers.

 

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

eToro USA will deliver a 1099-K form to eToro USA members who meet BOTH of the following conditions

  • Their  cryptocurrency-for-USD sales on the trading platform exceed 200 transactions during the calendar year, AND
  • Their total sales proceeds from all sales of  cryptocurrency-for-USD exceed $20,000 during the calendar year. You must have had at least 200 orders with matches during 2019, whose total value is equal to or greater than the following state schedules:
     

State

Total proceeds equal or exceed

Arkansas

$2,500

District of Columbia 

$600

Massachusetts 

$600

Mississippi 

$600 

Missouri

$1,200

New Jersey

$1,000

Vermont 

$600 

 

How will I receive a Form 1099-K?

If eToro USA is required to send you a 1099-K, you will receive an email from eToro USA with instructions on how to retrieve it. A copy will also be remitted to the IRS.

 

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, prepare forms

You can use the 1099-K provided by eToro USA to help report an income tax return. Please consult a tax expert for help or if you have any questions. For more information on understanding your 1099-K, please visit the IRS’s reference page.

 

What information is in the 1099-K form?

eToro USA is required to report gross proceeds from all  cryptocurrency-for-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.

 

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.

 

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

Yes! eToro USA is happy to resend the Form 1099-K. Please submit a request through our contact form here. When searching through your email, please recall that the original Form 1099-K is delivered from IHS Markit, a third party, and not from eToro USA directly.

 

What information is reported on the 1099-K form? 

Form 1099-K reports third-party network payments received for the calendar year. eToro USA is required to report gross proceeds from all  cryptocurrency-for-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.

 

What is a 1099-INT form and will I get one?

The 1099-INT reflects interest payments received on your free credit balances.

In order to be eligible for a 1099-INT, you must have earned $10 or more in interest.

 

Why did I not receive a 1099-INT even though I received interest?

In order to be eligible for a 1099-INT, you must have earned $10 or more in interest; however, taxpayers are still required by the IRS to report and pay taxes on any earned income.

 

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.