[2026 Tax Return] A Preparation Checklist for Cryptocurrency Traders Before Year-End

By: WEEX|2025/11/27 07:30:00

There is only one month left in 2025. If you have made a profit from cryptocurrency trading, it is time to start preparing for your tax return. Many people may feel anxious, wondering, "What do I need to prepare for a tax return?" or "What should I do before the end of the year?"

In this article, we will provide a concrete guide on the preparations you should make before the end of the year for the tax return filing period between February and March 2026. By starting your preparations early, you can avoid the rush during the filing season and ensure a smooth tax return process.

First, check: Do you need to file a tax return?

Cases where a tax return is required

Employees: Annual income other than salary exceeds 200,000 yen

Sole proprietors/Freelancers: Generally required if you have income

Full-time traders: Profit exceeds 480,000 yen

If you are filing a tax return for medical expense deductions or the hometown tax donation program (Furusato Nozei), you must report your crypto asset income even if it is 200,000 yen or less. Also, note that you are still required to file for resident tax even if the amount is 200,000 yen or less.

Preparation 1: Organize your transaction history

The most important part of a tax return is accurately tracking your transaction history for the year.

Collect all transaction history

If you use multiple exchanges, download the transaction history from all of them. It is common to be able to download these in Excel or CSV format.

Information to collect

Trading history at each exchange
Deposit and withdrawal history
Records of transfers between wallets
Transactions on overseas exchanges

Taxable items often overlooked

Airdrops, staking rewards, and mining rewards are also subject to tax. Be sure to record the date received, quantity, and market value (converted to Japanese yen).

Preparation 2: Gather necessary documents

Documents obtained from exchanges

Annual transaction report: Available from mid-to-late January
Detailed transaction history: Transaction data in Excel/CSV format

Keep receipts for expenses

The following costs may be recognized as necessary expenses.

Trading fees and deposit/withdrawal fees
Costs for crypto-related books and seminar participation fees
Computers used for trading and communication expenses (pro-rating required)

Be sure to keep receipts and make a note of the purpose of use.

-- Price

Preparation 3: Determine your profit/loss calculation method

Total Average Method and Moving Average Method

There are two calculation methods recognized by the National Tax Agency.

Total Average Method (Recommended)

Calculated using the average purchase price for the year
Simple to calculate and chosen by many investors

Moving Average Method

Average acquisition cost is calculated each time a purchase is made
Accurate but complex to calculate

Once you have chosen a method, you must continue to use it.

Utilize calculation tools

If you have a high volume of transactions, consider using tax return support tools such as Cryptact, Gtax, or Koinly. They can import data from exchanges and automatically calculate your profit and loss.

Preparation 4: Consider strategic loss cutting

Tax savings through profit/loss offsetting

If you have a profit from cryptocurrency A and a loss from cryptocurrency B, you can offset the profit and loss by selling B within the year.

Example

Bitcoin: 1,000,000 yen profit
Ethereum: 300,000 yen unrealized loss
Sell within the year → Taxable amount is 700,000 yen

However, losses cannot be carried forward to the following year, so profit/loss offsetting is only valid within the same calendar year.

Strategy looking ahead to the 2026 tax reform

The tax rate may be reduced to 20.315% starting in 2026 (currently at the request stage).

If you have unrealized gains

Holding until 2026 may allow you to benefit from a lower tax rate (be aware of price volatility risk).

If you have unrealized losses

We recommend selling within 2025 to offset this year's profits. From 2026 onwards, it is expected to become a separate self-assessment taxation system, and offsetting with miscellaneous income will likely no longer be possible.

Decide on loss cutting by mid-December. The market tends to be volatile at the end of the year, and unexpected price fluctuations may occur.

Preparation 5: Confirm the filing schedule and method

2026 tax return period

Period: February 16, 2026 (Mon) – March 16, 2026 (Mon) (tentative)

e-Tax: Available 24 hours a day (excluding maintenance times)

Filing methods

e-Tax (Recommended)

File online from home. Available 24 hours a day using a My Number Card or ID/password method. Refunds are also faster.

Paper submission

Submit directly to the tax office or by mail. The counters will be crowded.

What happens if you don't file?

Additional tax for non-filing: 15–20% of the original tax amount
Delinquency tax: Up to 14.6% per annum
Heavy additional tax: 40% for intentional concealment

Exchanges have an obligation to provide information to tax authorities, so not filing carries a very high risk.

How to prepare your tax return

National Tax Agency's free tool

Tax Return Creation Corner allows you to create your tax return simply by following the on-screen instructions.

Commercial tax return software

Yayoi Blue Return Online, freee Accounting, and Money Forward Cloud Tax Return are paid software options that offer more user-friendly interfaces and support.

Cases where you should consider consulting a tax accountant

Profit is 5,000,000 yen or more
Using multiple exchanges or overseas exchanges
DeFi, NFT, mining, or other complex transactions
There are years in the past where you did not file

Tax accountant fees may be recognized as business expenses.

Preparation checklist until year-end

November – Early December

Download transaction history from all exchanges
Verify records of airdrops and staking rewards
Organize expense receipts
Decide on profit/loss calculation method
Select tax return tools/software

Mid-December

Execute strategic loss cutting (if necessary)
Perform preliminary calculation of annual profit/loss
Confirm My Number Card

January

Obtain annual transaction reports
Final profit/loss calculation
Draft the tax return form

February – March

Submit tax return (February 16 – March 16)

Summary | Smooth tax returns through early preparation

Key points

Employees need to file a tax return if income exceeds 200,000 yen
Collect history from all exchanges
Airdrops and staking rewards are also taxable
Always keep receipts for expenses
Tax savings possible through year-end loss cutting
Consider strategies looking ahead to the 2026 tax reform
Tax return period is February 16 – March 16, 2026

By starting your tax return preparations early, you can handle the process with peace of mind. To avoid the end-of-year rush, start your preparations little by little now.

If you want to learn more about cryptocurrency taxes, please check out our articles explaining tax rates and calculation methods.

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Disclaimer

WEEX and its affiliates provide digital asset exchange services, including derivatives and margin trading, only to eligible users in legally permitted regions. This content is for general information purposes only and does not constitute investment advice. Please consult with a professional before engaging in any trading. Cryptocurrency trading carries high risks, and you may lose all of your invested funds. By using WEEX services, you are deemed to have agreed to all relevant risks and terms of service. Please make your own decisions and invest within your means. For details, please check the Terms of Service and Risk Disclosure.