New Era of Digital Asset Tax Reporting (FORM 1099-DA)

The Internal Revenue Service is expanding its oversight of digital asset transactions, and Form 1099-DA represents one of the most significant regulatory developments affecting cryptocurrency investors, traders, and businesses. As digital assets become more integrated into the financial system, tax reporting expectations are shifting toward greater structure, transparency, and enforceability.

What Is Form 1099-DA

Form 1099-DA, Digital Asset Proceeds From Broker Transactions, is a new information return required under Internal Revenue Code Section 6045, as amended by the Infrastructure Investment and Jobs Act. The form is designed to report proceeds from the sale or disposition of digital assets, including cryptocurrencies and certain stablecoins.

Under IRC Section 6045(g)(3), digital assets are treated similarly to specified securities for information reporting purposes, placing digital asset brokers under reporting obligations historically applied to stock and bond transactions.

Who Must Issue Form 1099-DA

IRC Section 6045(c)(1) defines a broker as any person who, for consideration, regularly acts as an intermediary with respect to sales of property. Recent amendments expanded this definition to include digital asset brokers who facilitate transfers or dispositions on behalf of customers.

As a result, centralized cryptocurrency exchanges and other qualifying intermediaries are generally required to issue Form 1099-DA to customers and file copies with the IRS. The application of these rules to decentralized platforms continues to evolve as Treasury regulations are finalized.

What Information Is Reported

Form 1099-DA reports gross proceeds from digital asset dispositions, consistent with IRC Section 6045(a). At this stage, cost basis reporting may be limited depending on the type of digital asset and the broker’s ability to track historical transaction data.

It is critical to note that gross proceeds alone do not determine taxable income. Under IRC Section 1001(a), taxable gain or loss is calculated as the difference between the amount realized and the taxpayer’s adjusted basis in the asset.

Why This Matters for Taxpayers

Even if a taxpayer receives Form 1099-DA, the responsibility for accurate reporting remains with the taxpayer. IRC Section 6001 requires taxpayers to maintain sufficient records to substantiate income, deductions, and basis.

Relying solely on Form 1099-DA without reconciling personal records can lead to overstated taxable income or underreported losses, particularly where cost basis is incomplete or missing.

Increased Enforcement and Transparency

Form 1099-DA reflects the IRS’s broader effort to increase compliance in the digital asset space. IRC Section 7602 grants the IRS broad authority to examine records and verify information returns, reinforcing the importance of accurate reporting.

Additionally, failure to properly report digital asset transactions may expose taxpayers to accuracy-related penalties under IRC Section 6662, as well as information return penalties under IRC Sections 6721 and 6722 when applicable.

Practical Steps to Prepare

Taxpayers engaging in digital asset transactions should strengthen their documentation practices by tracking acquisition dates, cost basis, transaction fees, wallet transfers, and taxable events.

Need Help With Form 1099-DA or Digital Asset Tax Reporting?

If you have questions about Form 1099-DA, cryptocurrency reporting, or how digital asset transactions impact your tax return, our team at JCox CPAs & Advisors, P.C. is here to help. We work with individuals and businesses to ensure digital asset activity is reported accurately, compliantly, and in line with current IRS guidance.

Whether you need help reconciling Forms 1099-DA, calculating gains and losses, or filing your tax return with confidence, reach out to JCox CPAs & Advisors, P.C. to get your questions answered and your taxes filed correctly.

Contact us today to schedule a consultation and take the uncertainty out of digital asset tax reporting.

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2025 Tax Season Is Here

Tax Season Is Here and JCox Is Accepting New Clients

Tax season can be stressful, time-consuming, and expensive when you are not getting proactive guidance or clear communication. At JCox CPAs & Advisors, our goal is simple: make tax season easier, more strategic, and more cost-effective for individuals and business owners.

We are currently accepting new tax clients, and for a limited time, clients who switch to JCox can save 45% on their first year of tax filing.

Why Switch to JCox This Tax Season

Many taxpayers come to us after years of feeling rushed, confused, or surprised by their tax results. At JCox, tax preparation is not just about filing forms. It is about understanding your full financial picture and positioning you for better outcomes moving forward.

When you work with JCox, you receive:
• Clear, professional communication throughout the process
• Accurate, compliant tax preparation
• Strategic insight tailored to your situation
• A firm that understands both compliance and long-term planning

Whether you are an individual, self-employed professional, investor, or business owner, we take the time to get it right.

Save 45% When You Switch

To make switching easy, JCox is offering 30% off your first year of tax filing for new clients who transition to our firm. This offer is designed to remove the friction of changing providers while giving you immediate value.

This is ideal if you:
• Are unhappy with your current tax preparer
• Want more proactive tax planning
• Need a CPA who understands business, investments, and growth
• Prefer a firm that prioritizes accuracy and responsiveness

Now Is the Time

Tax season fills up quickly, and availability is limited. Waiting too long can mean delays, missed planning opportunities, or unnecessary stress. Switching early allows us to review your information properly and identify opportunities before filing deadlines approach.

If you are ready for a smoother tax season and meaningful savings, now is the time to make the move.

Ready to Get Started?

JCox is accepting new clients now. Switch this tax season and save 30% on your first year of filing.

Reach out today to secure your spot and take advantage of this limited-time offer.

2026 Tax Filing and Refund Dates: What to Expect

Our current turnaround times are as follows:

• Individual Income Tax Returns: 4 days

• Partnerships, C-Corporations, and S-Corporations: 4 days

These timeframes encompass thorough review and quality control processes, ensuring that your tax filings are both prompt and precise.

Understanding the timeline for receiving your tax refund is crucial for financial planning. The IRS typically issues refunds within 21 days after accepting an electronically filed return.

To provide a clearer picture, here's an estimated timeline for 2026 tax refunds based on the IRS acceptance date of your e-filed return:

Track YOUR Federal Refund Here: IRS.gov

Government Shutdown Won’t Immediately Impact IRS Operations (09-30-25)

The IRS has released its 2026 Lapsed Appropriations Contingency Plan, and here’s the key takeaway: if a government shutdown begins tomorrow, IRS operations will keep running as usual—at least for the first five days.

Why? The IRS still has funding available from the Inflation Reduction Act, which allows them to cover operations even during a lapse in appropriations. For taxpayers and tax professionals, this means there should be little to no disruption in IRS services as we head toward the critical October 15 filing deadline.

In short, while a government shutdown may cause concern in other areas, IRS functions are expected to remain stable in the immediate term.

Mid-Year Tax Planning Guide 2025: Why Planning Beats Panic

As we approach the second half of 2025, the importance of tax planning for small to middle-class families has never been clearer. Recent legislative changes, inflation adjustments, and IRS enforcement trends underscore the value of early, strategic action. At JCox CPAs & Advisors, P.C., we believe proactive tax planning should be the norm, not the exception.

Why Be Proactive With Tax Planning?

Many taxpayers are familiar with tax preparation: the annual ritual of entering figures into software or handing paperwork to a preparer, then hoping for a refund or bracing for a bill. This process, while necessary, is reactive.

Tax planning is different. It's forward-looking. Rather than waiting until the end of the year, tax planning involves consistently evaluating your income, deductions, and credits throughout the year to ensure you're making smart decisions along the way. Whether you explore strategies on your own or work with a qualified tax advisor, planning in advance reduces surprises, identifies savings, and improves overall financial health.

Exclusive Offer: Tax Return Review + Free Mid-Year Planning

Did you file your 2024 tax return yourself or through another provider? JCox CPAs & Advisors is offering:

• A detailed review of your 2024 tax return

• A 40% discount on any necessary amended return

• A complimentary mid-year 2025 tax planning session

We’ll help determine whether adjustments are needed and build a custom plan for the rest of the year, so you’re not caught off guard come filing season.

Key Legislative Changes and Relevant IRC Sections

1. Standard Deduction Increase – IRC §63(c)

The standard deduction for 2025 has increased to $30,000 for married couples filing jointly and $15,000 for single filers. This simplifies filing and reduces taxable income for many families, potentially eliminating the need to itemize deductions.

2. Updated Child Tax Credit – IRC §24

The Child Tax Credit has increased to $2,500 per qualifying child. However, income thresholds have been updated, and eligibility is now subject to tighter rules. A mid-year review helps determine whether you're maximizing your credit opportunities.

3. Raised SALT Deduction Cap – IRC §164(b)(6)

Taxpayers with adjusted gross income under $500,000 can now deduct up to $40,000 in state and local taxes. This may revive itemized deductions for those in high-tax states, especially when paired with mortgage interest or charitable contributions.

4. Tip and Overtime Income Relief – IRC §62(a)

New legislation now allows deductions for reported tip income and qualified overtime under above-the-line adjustments. This change benefits hourly and service industry workers who often face higher effective tax rates on variable income.

5. Estimated Payments and Withholding – IRC §6654 and §3402

Now is the time to review your W-4 or calculate estimated taxes to avoid underpayment penalties. Mid-year is ideal for making course corrections based on expected year-end income.

6. Retirement Planning Opportunities – IRC §219 and §414(v)

Contributions to IRAs and 401(k)s can reduce taxable income while securing your future. Catch-up contributions for taxpayers aged 50+ allow additional savings. Planning ahead helps ensure contribution deadlines aren't missed.

7. Business Owners: Optimize Now – IRC §179 and §199A

Self-employed individuals and pass-through entities should evaluate:

• Equipment purchases for IRC §179 deductions

• Compensation and qualified income for the 20% QBI deduction under IRC §199A

These choices can significantly reduce your overall tax bill, but require proper planning before year-end.

8. Estate and Gift Strategies – IRC §2503 and §2010

Annual gift exclusions remain at $18,000 per recipient. The elevated lifetime exemption under IRC §2010 remains available through 2025, but is set to sunset. Planning now ensures your wealth transfer strategy is optimized before potential changes take effect.

Final Thoughts: Plan With Purpose by Connecting With Us Today

Tax planning is not just about minimizing taxes—it’s about building financial resilience. The sooner you identify opportunities, the more leverage you have to act. Let’s make 2025 the year you lead your finances, not follow your filing.

Connect with JCox CPAs & Advisors today to get started with your custom mid-year strategy.

Schedule your meeting here

Get Prepared for Tax Filing 2024!

Here are some essential steps to help you get prepared:

1. Gather Your Documents:

• W-2s, 1099s, or other income statements

• Business expense records if you're self-employed

• Mortgage interest statements

• Proof of charitable donations

• Health insurance documentation

2. Review Last Year's Return:

• Look over your prior year’s tax return to ensure you don't miss any carryovers (e.g., deductions or credits) and to identify any possible changes.

3. Plan for Deductions & Credits:

• Don't forget about possible deductions for things like student loans, retirement contributions, or education expenses.

• Consider tax credits like the Child Tax Credit or Earned Income Tax Credit.

4. Track Any Life Changes:

• Changes like getting married, having a baby, or buying a home could affect your tax situation. Make sure you account for these.

5. Set Up Your Tax Payment Plan:

• Estimate if you will owe taxes and start setting aside money now, or adjust your withholdings to avoid surprises.

6. Consider Professional Help:

• Tax laws are always changing, and getting professional advice ensures you don’t miss out on any savings or deductions you may qualify for.

Don't wait until the last minute! Plan ahead to ensure a smooth and stress-free tax season. If you need help getting started, reach out to us at JCox CPAs & Advisors! We’re here to make your tax filing easy and efficient.

A Comprehensive Guide for Sole Proprietors on Paying Quarterly Estimated Taxes

Understanding Sole Proprietorship

A sole proprietorship is the simplest and most common form of business structure. It is owned and operated by a single individual, meaning there is no legal distinction between the owner and the business. This structure offers full control to the owner and allows for simple tax reporting. However, it also means that the owner is personally liable for all debts and obligations of the business.

As a sole proprietor, you report your business income and expenses on your personal tax return, specifically using Schedule C (Form 1040). This form allows you to detail your profits and losses from your business activities.

Why Pay Estimated Taxes?

The IRS requires taxpayers, including sole proprietors, to pay estimated taxes if they expect to owe $1,000 or more in tax for the year. This is essential because sole proprietors typically do not have taxes withheld from their business income, unlike employees who have taxes withheld from their paychecks.

Steps for Paying Quarterly Estimated Taxes

1. Determine Your Tax Liability: Calculate your expected adjusted gross income (AGI), taxable income, taxes, credits, and other payments for the year.

2. Use IRS Form 1040-ES: Form 1040-ES is used for estimating your tax payments. It includes a worksheet to help you estimate your taxable income and tax liability.

3. Calculate Quarterly Payments: Divide your estimated tax liability by four to determine your quarterly payment amount.

4. Know the Due Dates: Estimated tax payments for sole proprietors are typically due on the following schedule:
   - First Quarter: April 15
   - Second Quarter: June 15
   - Third Quarter: September 15
   - Fourth Quarter: January 15 of the following year

5. Make Your Payments: Payments can be made electronically through the IRS Direct Pay system, or you can send a check or money order along with the payment voucher from Form 1040-ES.

6. Keep Accurate Records: Maintain accurate records of your income and expenses throughout the year.

Relevant Tax Codes and Forms

- Federal Forms:
  - Form 1040: U.S. Individual Income Tax Return, which includes income from your sole proprietorship.
  - Schedule C (Form 1040): Profit or Loss from Business, where you report your business income and expenses.
  - Form 1040-ES: Estimated Tax for Individuals.

- Georgia State Forms:
  - Form 500: Georgia Individual Income Tax Return, used to report income, deductions, and credits for state tax purposes.
  - Form 500-ES: Georgia Estimated Tax Payment Coupon, which is used to make estimated tax payments to the state.

Caution

The examples provided (below) assume that the sole proprietor is a Georgia resident who is a single filler. Tax laws and rates can vary significantly by state, so it’s essential to consult local regulations or reach out to JCox CPAs & Advisors, P.C. if you're operating outside of Georgia.

Example Breakdown

Example Scenario

- Total Expected Income for the Year: $50,000
- Total Expected Business Expenses: $15,000
- Filing Status: Single
- Standard Deduction for the Year: $13,850 (for 2023)

Step 1: Calculate Federal Tax Liability

1. Calculate Net Income:
   Net Income = Total Income - Total Expenses
   Net Income = 50,000 - 15,000 = 35,000

2. Adjust for Standard Deduction:
   Taxable Income = Net Income - Standard Deduction
   Taxable Income = 35,000 - 13,850 = 21,150

3. Apply Federal Tax Rates:
   The 2023 federal income tax brackets for a single filer are as follows:
   - 10% on income up to $11,000
   - 12% on income over $11,000 up to $44,725

   Calculate Tax:
   - First $11,000: 11,000 × 0.10 = 1,100
   - Remaining income ($21,150 - $11,000 = $10,150): 10,150 × 0.12 = 1,218
   - Total Federal Tax Liability: 1,100 + 1,218 = 2,318

4. Calculate Quarterly Payments:
   Quarterly Federal Estimated Tax Payment = Total Tax Liability / 4
   Quarterly Federal Estimated Tax Payment = 2,318 / 4 = 579.50

Step 2: Calculate Georgia State Tax Liability

1. Apply Georgia Tax Rates:
   Georgia uses a similar tax bracket system. The 2023 tax brackets for a single filer are:
   - 0% on income up to $750
   - 1% on income from $751 to $2,250
   - 2% on income from $2,251 to $3,750
   - 3% on income from $3,751 to $5,250
   - 4% on income from $5,251 to $7,000
   - 5% on income from $7,001 to $10,000
   - 5.75% on income over $10,000

2. Calculate Georgia Tax:
   Calculate Tax:
   - First $750: 750 × 0.00 = 0
   - From $751 to $2,250: (2,250 - 750) × 0.01 = 15
   - From $2,251 to $3,750: (3,750 - 2,250) × 0.02 = 30
   - From $3,751 to $5,250: (5,250 - 3,750) × 0.03 = 45
   - From $5,251 to $7,000: (7,000 - 5,250) × 0.04 = 70
   - From $7,001 to $10,000: (10,000 - 7,000) × 0.05 = 150
   - Over $10,000: (21,150 - 10,000) × 0.0575 = 643.75

  Total Georgia State Tax Liability:
   0 + 15 + 30 + 45 + 70 + 150 + 643.75 = 953.75

3. Calculate Quarterly Payments:
   Quarterly Georgia Estimated Tax Payment = Total Tax Liability / 4
   Quarterly Georgia Estimated Tax Payment = 953.75 / 4 = 238.44

Summary of Estimated Tax Payments

- Total Federal Tax Liability: $2,318
- Quarterly Federal Estimated Tax Payment: $579.50
- Total Georgia State Tax Liability: $953.75
- Quarterly Georgia Estimated Tax Payment: $238.44