How the Crypto Tax Preparation Process Works

The 4-Step Process

Step 1: Discovery Call (Free)

Duration: 15-30 minutes

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Everything starts with a conversation. During your free discovery call, I'll:

• Understand your situation: What do you need help with? Tax preparation? IRS notice? Cost basis reconstruction?

• Assess complexity: How many transactions? How many wallets/exchanges? Any DeFi activity? How many tax years?

• Discuss your needs: One-time project or ongoing relationship?

• Provide a fee estimate: Based on your situation, I'll quote a price before any commitment

• Answer your questions: No pressure—just information to help you decide

 

What you need to prepare: Nothing specific—just a general sense of what you need help with.

 

Schedule your free discovery call →

 

Step 2: Document Collection

Duration: Varies (your pace)

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Once you decide to proceed, I'll send you access to the secure client portal (TaxDome) where you can:

• Upload documents securely

• Complete intake questionnaire

• Sign engagement letter electronically

• Communicate directly with me

 

Documents I Typically Need

For Crypto Tax Preparation:

• Exchange CSV exports (Coinbase, Kraken, Gemini, Binance.US, etc.)

• Wallet transaction records (MetaMask, Ledger, Trezor, etc.)

• Form 1099-DA (if received from exchanges for 2025 transactions)

• Other 1099 forms (1099-MISC, 1099-K, etc.)

• DeFi, NFT, staking, mining, airdrop, and liquidity pool activity logs

• Prior year tax returns

 

For Individual/Business Tax:

• Prior year tax returns

• W-2s, 1099s, K-1s, brokerage statements

• Business financials (P&L, balance sheet, bank/credit card statements)

• Payroll reports, 1099 contractor info

 

Note: Not all exchanges issue complete tax forms. You should track all crypto activity across exchanges and wallets, as Form 1099-DA reports gross proceeds but may not include cost basis for 2025 transactions.

 

Step 3: Analysis & Preparation

Duration: 1-2 weeks (longer for complex situations)

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This is where the real work happens. I:

• Import and reconcile all transaction data

• Track transfers between wallets to prevent double-counting

• Calculate cost basis per wallet (as required by Rev. Proc. 2024-28)

• Classify transactions properly (capital gains vs. ordinary income)

• Identify issues like missing cost basis, orphaned transfers, or software errors

• Reconcile with Form 1099-DA if received—and document differences

 

Transaction Categorization

I classify activity based on the facts:

• Disposals (sales, swaps, spending) → Capital gains/losses on Form 8949 and Schedule D

• Receipts (staking rewards, mining income, airdrops) → Ordinary income when you have dominion and control

• Hard fork proceeds → Ordinary income only when you receive and can access new units (the fork itself is not taxable)

• Business activity (mining as a trade, paid services) → Schedule C and related filings

 

Step 4: Review & Filing

Duration: 2-3 days after preparation is complete

 

Before filing, you receive:

• Draft return for your review

• Plain-English summary of key numbers (proceeds, gains/losses, income items)

• Supporting schedules including complete Form 8949

• Opportunity to ask questions before finalizing

 

After your approval, I file electronically (or provide filing-ready copies, depending on your engagement). I also provide documentation guidance for your records.

 

After Filing: Ongoing Support

The engagement doesn't end when you file:

• IRS notice support: If you receive a CP2000 or other notice related to your return, I help respond

• Documentation: I help you understand what to keep and how to organize for next year

• Questions: Reasonable follow-up questions are included

• Next year planning: Recommendations for better recordkeeping going forward

 

Typical Timeline

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Tools I Use

TaxDome Client Portal

The secure client portal provides:

• Bank-level encryption for document uploads

• Electronic signature capability

• Secure messaging

• Document storage and access

• Mobile app for convenience

 

Professional Crypto Tax Software

For cryptocurrency clients, I use professional-grade tools to:

• Import transaction data from all major exchanges

• Calculate cost basis with multiple methods (FIFO, Specific ID)

• Track wallet-by-wallet basis per Rev. Proc. 2024-28 requirements

• Reconcile with Form 1099-DA data

• Generate IRS-ready Form 8949

 

CPA Review

Software is a tool, not a complete solution. Every engagement includes:

• CPA review of all work product

• Manual verification of complex items

• Professional judgment on grey areas

• Quality control before delivery

 

What I Handle

Cryptocurrency

• Centralized exchanges (Coinbase, Kraken, Gemini, Binance.US, etc.)

• Self-custody wallets (Ledger, Trezor, MetaMask)

• DeFi protocols (Uniswap, Aave, Compound, Lido)

• Staking (direct, exchange, liquid staking)

• NFTs (purchases, sales, royalties)

• Mining (proof-of-work income)

• Multi-chain (Ethereum, Bitcoin, Solana, Arbitrum, etc.)

• IRS correspondence (CP2000, Letter 6173)

• Form 1099-DA reconciliation

 

Tax Returns

• Individual (Form 1040)

• Business (1065, 1120-S, 1120)

• Multi-state returns

• Investment income (stocks, real estate, crypto)

 

Bookkeeping

• Small business monthly accounting

• Accounts payable/receivable

• Bank reconciliation

• Financial statements

• QuickBooks management

About Monaco CPA

Monaco CPA is a virtual accounting firm based in Livingston, New Jersey, serving clients nationwide. Founded by Gregory Monaco, CPA—a New Jersey-licensed CPA with an MBA in Business Analytics—the firm provides cryptocurrency tax preparation, individual and business tax services, bookkeeping, and advisory services.

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Greg's expertise has been featured in Yahoo Finance, Nasdaq, GOBankingRates, and BeInCrypto.

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Last updated: December 22, 2025