Your Guide to Filing for Crypto Tax Extension 2025

Tynisa (Ty) Gaines
ByTynisa (Ty) Gaines, EAReviewed byZac McClure, MBAUpdated on December 23, 2024 · minute read
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  • Taxpayers can apply for a six-month extension to file their tax returns using IRS Form 4868, which must be submitted by the usual April 15th deadline.

  • While the extension grants more time to file, it does not extend the time to pay any taxes due, which means estimated taxes must be paid by the original due date to avoid penalties.

What is a tax extension

A tax extension provides taxpayers additional time to file their returns without penalties for late submission. This extension is critical to effectively managing both personal and investment finances, especially in the complex landscape of cryptocurrency.

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Why should you consider a tax extension

Requesting a tax extension allows you more time to ensure all financial documents are accurate and complete. This is particularly beneficial for crypto investors who deal with multiple wallets and exchanges and need additional time to track and report each transaction correctly.

Can I get an extension to file my crypto taxes

Filing an extension for your crypto taxes is straightforward. By submitting IRS Form 4868 by April 15, you can extend your filing deadline to October 15, giving you six more months to prepare your tax return.

Learn more about how to report cryptocurrency on taxes.

What happens if you file crypto taxes late

Missing your filing deadline without an extension can lead to significant penalties and interest. It's crucial to either file on time or secure an extension to avoid these potential financial hits.

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How do tax extensions work?

Tax extensions allow you extra time to file your return but do not extend the deadline for tax payments. This distinction is essential to plan your financial obligations without incurring additional costs.

Crypto tax extension checklist

Preparing for a tax extension requires meticulous organization to ensure you meet all IRS requirements without error. Here's a detailed checklist to guide you through the process:

  • Gather Documentation: Assemble necessary documentation, including W-2s, 1099s, and detailed records of your cryptocurrency transactions. These documents are fundamental in accurately reporting your financial activities.

  • Estimate Your Tax Liability: Review your financial documents to calculate your estimated tax liability. This helps you understand how much you may owe and prepare for the next step.

  • File IRS Form 4868: Submit Form 4868 by the April deadline to officially request your extension. This form is crucial as it extends the filing deadline to October 15, providing additional time to finalize your tax return.

  • Pay Estimated Taxes: If you expect to owe taxes, it's critical to pay the estimated amount by April 15. This preemptive step helps avoid penalties and interest for underpayment.

  • Verify Personal Information: Ensure all personal information is current and accurate. Discrepancies can lead to delays or other issues.

  • Review Previous Returns: Look over last year’s tax return to aid in estimating this year's liability. This can highlight changes in your financial situation and help forecast your current tax responsibilities.

  • Organize Deductions and Credits: Organize any documents related to deductions or credits you plan to claim. Proper documentation supports these claims and ensures they are processed correctly.

  • Stay Informed: Keep abreast of the latest tax rules by visiting the IRS website or consulting a

    crypto tax professional. This ensures compliance and can provide insights into new deductions or credits that could affect your tax situation.

By following this comprehensive checklist, you can navigate the tax extension process more smoothly and ensure your tax responsibilities are addressed accurately and on time.

Learn how to avoid a crypto tax audit.

Late filing consequences: What happens if you miss the deadline

If you miss the filing deadline and have yet to secure an extension, the IRS may impose various penalties and interest on the owed taxes. These can significantly increase the total amount you'll eventually have to pay.

Crypto tax extension FAQs

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Tynisa (Ty) Gaines
Tynisa (Ty) GainesTax Expert at TokenTax
Tynisa (Ty) Gaines, EA has more than 20 years of experience as a tax professional. Ty has published numerous tax articles, two tax e-books, and an academic publication on cryptocurrency for the National Income Tax Workbook.
Zac McClure
Reviewed byZac McClureCo-Founder & CEO at TokenTax
Zac co-founded TokenTax after his career in international finance and accounting at JPMorgan, Imprint Capital and Bain. He has worked in more than half-dozen countries and received his MBA from the UPenn Wharton School.

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