onboarding

Tax Report — your year-end filing workflow

Pick a method, export CSV, reconcile against your CPA, file

7 min · beginner

What you'll have when finished

  • Understand the FIFO vs LIFO vs HIFO tradeoff in concrete dollar terms
  • Pick the right method for your situation legally
  • Export 8949-ready CSV for your CPA or tax software
  • Reconcile haythix numbers against your bot dashboards (they will differ — and that's correct)

Before you start

  • Not tax advice. Always reconcile with a CPA before filing.
  • External wallets/exchanges you haven't connected won't be included. Tax filings require the full picture.
  • Switching methods between years is legal but draws IRS attention. Pick one and stick with it where possible.

Walkthrough

  1. Open Tax Report and pick your tax year

    Navigate to **Intelligence → Tax Report**. The page defaults to the current calendar year. For filing season (Jan-Apr), you almost always want LAST year: - Filing in 2026? Pick **2025** (the year being filed). - Want a lifetime view to spot patterns? Pick **All years**. The cost-basis engine runs the moment you change the dropdown. Give it a few seconds to match all lots.

    Success criteria: Right tax year selected · Page finished loading

  2. Read the Method Comparison card — the most important section

    Below the summary cards is a **Method Comparison** card showing all three methods on the SAME trades: - **FIFO** — oldest lots first (IRS default) - **LIFO** — newest lots first - **HIFO** — highest-basis lots first (typically lowest tax) One method will be highlighted as "best" (lowest total P&L = lowest tax bill). HIFO usually wins, but not always. **Concrete example:** suppose in 2025 you sold $100 worth of ETH. You have three buy lots in your history: - Lot A: bought 0.05 ETH at $2000 in Jan 2024 (basis $100) - Lot B: bought 0.03 ETH at $2500 in Mar 2025 (basis $75) - Lot C: bought 0.02 ETH at $3000 in Aug 2025 (basis $60) The sell at $100 proceeds: - **FIFO** matches against Lot A → 0% gain (basis was exactly $100) - **LIFO** matches against Lot C (newest) → $40 gain - **HIFO** matches against Lot C (highest basis at $3000) → $40 gain ($100 - $60) Same trade, three different gain numbers. Pick the lowest legal one.

    Success criteria: Read all three method numbers · Identified which is lowest

  3. Read the three Summary cards

    **Short-term P&L** = gains/losses on lots held LESS THAN 1 YEAR. Taxed at ORDINARY INCOME rates (22-37% federal for most filers + state). The painful bucket. **Long-term P&L** = gains/losses on lots held 1+ YEAR. Taxed at preferential rates (0% / 15% / 20% federal). The good bucket. **Total realized P&L** = sum of both. This is the headline number that flows to Form 8949 → Schedule D. If your Short-term P&L is much bigger than Long-term, you're an active trader — your taxes will be higher than a HODLer with the same total return. Worth knowing. If Long-term P&L is negative and Short-term P&L is positive, you can use the long-term losses to offset short-term gains. The engine surfaces this in the matched-lot rows.

    Success criteria: Read all three summary cards · Identified which bucket dominates

  4. Expand the educational explainer (collapsible blue card)

    Click **"Understanding FIFO / LIFO / HIFO — and why this can differ from your bot dashboards"** to expand it. This card answers the #1 support question: "Why doesn't my Tax Report match my Grid Bot / Smart Trade dashboard P&L?" **The short answer:** - Your bot dashboard shows **per-strategy** P&L. Grid Bot pairs each sell at level X+1 with its buy at level X, in isolation. - The IRS treats **all your ETH as one pool**, regardless of which bot bought it. A Grid Bot sell at $2105 can legitimately match against a Smart Trade buy at $2200 from weeks ago — that's a tax loss even though your bot considers it out of scope. **Both numbers are right.** The bot dashboard is your operational view; the Tax Report is what TurboTax / Koinly / Coinbase would produce — and what the IRS expects. This is normal. Don't panic when the numbers differ.

    Success criteria: Read the explainer · Understood why bot P&L and Tax Report P&L differ

  5. Pick your method (FIFO / LIFO / HIFO)

    **FIFO** — the IRS default. Safest to defend in an audit. Use if: - You're filing your first crypto tax return and want the simplest story - Your CPA recommends sticking with the default - The Method Comparison shows FIFO is only slightly worse than HIFO **HIFO** — typically lowest tax. Allowed by the IRS as "specific identification." Use if: - You want to minimize taxes legally - Your tax software supports specific-ID (TurboTax, Koinly, CoinTracker all do) - You're willing to document the method on Form 8949 **LIFO** — rarely the right choice for crypto. Use only if: - Your CPA specifically recommends it - You have a peculiar lot structure where LIFO happens to win **The standard recommendation for most retail filers: HIFO.** Saves the most money, and modern tax software handles the specific-ID requirement automatically.

    Success criteria: Picked a method · Understood the tradeoff

  6. Export CSV

    Click **Export CSV** in the top-right. The file is named `haythix-tax-{METHOD}-{YEAR}.csv` (e.g. `haythix-tax-HIFO-2025.csv`). The columns map directly to IRS Form 8949: - **Asset** — the token sold (e.g. ETH) - **Qty** — quantity sold - **Acquired** — date the matched buy lot was originally bought - **Sold** — date of the sell - **CostBasis** — what you paid (USD) - **Proceeds** — what you received (USD) - **GainLoss** — Proceeds minus CostBasis - **Term** — short (held <1y) or long (held ≥1y) - **HoldingDays** — exact day count - **Source** — which bot/surface generated this fill (Grid Bot, Smart Trade, CEX, DEX Swap, etc.) Drop this CSV into: - **TurboTax** — Premium or higher; "Crypto" section - **Koinly** — manual CSV import - **CoinTracker** — manual CSV import - **Your CPA** — just email it The Source column is haythix-specific extra detail your CPA may find useful for spotting unusual activity, but it doesn't map to a standard 8949 column.

    Success criteria: CSV downloaded · Verified the row count matches the lot count on the Total P&L card

  7. Reconcile against your other sources

    Before filing, reconcile haythix's numbers against: 1. **Each connected exchange's native tax report** — Coinbase, Binance, Kraken all generate their own 8949 line items. These should mostly agree with haythix on the same fills, but exchange reports won't see your DEX activity. 2. **DEX swap history** — if you've done wallet swaps that haythix tracked, the Tax Report includes them. Native exchange reports won't. 3. **External wallets/CEXes not connected** — these are NOT in haythix. You need to add them manually (or via a separate tool like Koinly that aggregates everything). **The honest reality:** if your trading is spread across 4 exchanges + 2 wallets + 3 DEX chains and you've only connected 2 of those to haythix, this report covers about 30% of your taxable activity. Either connect everything or use a dedicated aggregator like Koinly as the final source of truth. For users with everything on 1-2 connected exchanges, haythix's Tax Report is sufficient as the primary 8949 source.

    Success criteria: Identified any unconnected sources · Decided whether haythix is sufficient or need aggregator

What's next

Once this year's filing is done: **Connect any missing exchanges or wallets** so next year's Tax Report is complete from day 1. [Settings → Connections](/settings?tab=connections). **Set up Tax-Loss Harvest as a quarterly routine** — every quarter, run [Tax Strategy](/tax-strategy?tab=harvest) and harvest any losses >$100. Done in real time throughout the year, this beats waiting until December. **Save the disclosure blocks** from your Tax Report runs. Take a screenshot of the Method Comparison card so you have a record of why you chose HIFO (or whichever method) and what the alternatives would have produced. **For very large filers ($100k+ realized P&L):** consider upgrading to a dedicated crypto tax aggregator (Koinly, CoinTracker) that covers ALL your sources, not just the ones connected to haythix.